Anchoring bias is the tendency for traders to allow an initial piece of information to have a disproportionate influence on future decisions, regardless of its relevance. For example, research showed that individual's estimates of stock returns were significantly influenced by the starting value they were given – the 'anchor'. The best way to prevent anchoring bias in trading is by performing comprehensive research and analysis of the market to identify your own anchor.

<p>Anchoring bias is the tendency for traders to allow an initial piece of information to have a disproportionate influence on future decisions, regardless of its relevance. For example, research showed that individual's estimates of stock returns were significantly influenced by the starting value they were given – the 'anchor'. The best way to prevent anchoring bias in trading is by performing comprehensive research and analysis of the market to identify your own anchor.</p>

When it comes to investing or trading, your mindset is one of the most important things that play a part. How does psychology impact trading? Discover the factors that can influence financial decisions – personality, emotions and moods, biases and social pressures. We unpack these in this series, Trading Psychology, brought to you by IG.

<p>When it comes to investing or trading, your mindset is one of the most important things that play a part. How does psychology impact trading? Discover the factors that can influence financial decisions – personality, emotions and moods, biases and social pressures. We unpack these in this series, Trading Psychology, brought to you by IG.</p>

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