Breaking Cognitive Biases

1. I've been thinking a lot lately about how to break my own cognitive biases. From the perspective of lifelong growth, when things are going particularly smoothly at a certain stage, it's actually a good time to challenge your assumptions.

2. When things are going well, you're more easily fooled by rewards.

3. For example, if you make consecutive profits in investing, it's easy to attribute it to skill, but it might just be that the market's style happens to favor you.

4. If a company you bought goes up, it might just be a combination of liquidity, sentiment, and crowded capital giving it a push.

5. Consistently collecting option premiums doesn't necessarily mean your strategy is unbeatable; it could just be a temporarily favorable volatility environment, and tail risks haven't arrived yet.

6. Don't stay trapped in the "Wow, I'm so good" mindset. Instead, shift your thinking: this time it went well, what part was skill, what was luck, and what was just the environment being favorable?

7. Am I currently amplifying risks because things are going smoothly? This is the question I keep asking myself over and over.

8. Being able to actively doubt yourself even when things are going well shows you're leveling up.

9. What truly skilled traders can do: in favorable conditions, they reduce leverage, shed illusions, and avoid self-deification.