Home › Knowledge › Atlas of Trading Mistakes › The better-than-average effect The better-than-average effect
Atlas of Cognitive Biases #12 · Overconfidence. Everyone is above average
What it looks like in trading
“Most traders lose, but I'm different”
dismissing industry statistics
no plan for things going worse than expected
An example from a session
Research on day traders' accounts in Brazil (Chague, De-Losso and Giovannetti, 2019): among those who traded for more than 300 days, 97% lost money and only about 1% earned more than the minimum wage. Every one of them believed at the start that they'd be in the profitable minority.
Hetman Capital Club
What you get in Hetman Capital Club
the full Atlas: 65 biases, each with a shield and a journal exercise tests of the biases on real Dow Jones data (the “Biases by the numbers” series) the trading journal and the trader's mental workshop the US session live, where you can see these biases in practice See what's inside the Club
What the research says
Ola Svenson (1981): 93% of the US students surveyed thought they drove better than the average participant. The effect recurs in ratings of intelligence, ethics and professional skill.
Related biases
🔒 In the full version in the Club
The shield – how to defend yourself : concrete rules to write into your trading plan. An exercise for the week : how to catch this bias in your journal. Plus tests on real Dow Jones data and bias-recognition training. (The Club is in Polish.)
Unlock the full Atlas in the Club
Frequently asked questions
What is the better-than-average effect? Most people rate their own abilities as above average. Statistically, they can't all be right.
How does the better-than-average effect show up in trading? Typical signs: “Most traders lose, but I'm different”; dismissing industry statistics; no plan for things going worse than expected.
Educational content, not psychological advice or an investment recommendation.
How I trade
A real market. I trade futures contracts on the regulated CME exchange in Chicago, with one central order book where all buyers and sellers meet.Professional tools. Order flow, footprint charts, the order book (DOM), volume profile and delta on a professional platform – the tools professional futures traders use. See them in the Hetman Terminal → Paid data, practice on the Hetman Index. I pay for exchange data and use it for my own trading. On this site and on the stream we practise order flow on the Hetman Index – a training instrument with simulated data.Hetman Capital Club
Now you know this bias. See how to catch it live. In Hetman Capital Club each of the 65 biases has a shield for your trading plan and a journal exercise, and in the live session I show when they really appear: after a loss, after a winning streak and before macro data. The Club is in Polish.
Join the Club 65 biases checklist (in the Club)
Cancel anytime. Educational content – no trade calls and no recommendations.