Linda reveals truth about your thinking...

In your own mind, answer this question about Linda

Linda is 31 years old, single, outspoken, and very bright. She majored in philosophy. As a student, she was deeply concerned with issues of discrimination and social justice, and also participated in anti-nuclear demonstrations.

Which of these two options is more probable:

Linda is a bank teller, or Linda is a bank teller and active in the feminist movement?

Psychology theory tells us that 80%-90% of most people will have answered (b).

Why (b) when there is no clear evidence that Linda is going to be active in the feminist movement?

Why make such a significant personal judgement about a person we know practically nothing about after reading a single paragraph?

This is because in an environment of uncertainty, we as humans tend to make intuitive, irrational judgements rather than rational decisions.

These decisions will be at best biased, or too often wrong.

This is even more serious when combined with the fact that humans suffer from cognitive dissonance, or the tendency to cling to one's beliefs, even when presented with incontrovertible evidence to the contrary.

This means many people will continue to stick with their emotional-based beliefs despite what they are taught or shown.

Part of this is due to the fact that amidst the chaos of social cues, humans must render judgments, generate inferences, make decisions and solve tangible problems in real time as events happen.

Evolution rewards intuitive reactions that have led to humans finding food, choosing a mate and, more recently, making a fortune on the stock market.

But, here is the catch. Intuitive reactions and judgements - especially in shares - are generally a million to one shot at best. Even when backed by a small amount of evidence, the likelihood of these reactions making money is practically zero.

The stock market is driven by fear, greed, hope, ego and most of all, by people.

Always remember that trading emotionally does not work and that is why you need to stay with your trading system, even though it will be your natural human reaction to go with your gut feeling.

Keep in mind that a trading system is a set of RULES that define your actions given any circumstance that might arise made of the 5 components.

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