What No Chart Can Show You

OFZA's CEO Amir Tabch has spent years studying the psychology behind trading decisions. What his research reveals is relevant to every market participant - regardless of experience level.

Markets have never been more accessible, with participation now extending far beyond traditional institutional players. Market participation has expanded dramatically- across more asset classes, on more platforms, with more information available at their fingertips than any previous generation of traders could have imagined.

And yet access to information has not made decision-making easier. If anything, it has made it harder. More data means more noise. More opportunities mean more decisions under pressure. More platforms mean more moments where the wrong call costs real money. The tools available to traders have improved dramatically. The mind using those tools has not evolved at the same pace.

That gap - between the sophistication of the market and the consistency of the person navigating it - is where most trading performance is actually won or lost.

OFZA's CEO Amir Tabch spent years examining this formally. His academic research, submitted to the Society of Technical Analysts as part of his MFTA, focused specifically on cognitive bias - the mental patterns that distort how traders process information, form judgements, and make decisions under pressure. Not as a theoretical exercise, but as a practitioner trying to understand why technically competent people keep making the same categories of error.

What becomes clear from the research is not that traders lack discipline. It is that discipline alone was never going to be enough. The patterns run deeper than behaviour. They run through the structure of human cognition itself - and the market has a reliable way of finding them.

Understanding them is the first step toward accounting for them.

The brain is not built for markets

Here is the uncomfortable part. The same mental shortcuts that help us navigate everyday life - fast pattern recognition, following the crowd, trusting our gut - become liabilities the moment we apply them to financial markets.

In most situations, shortcuts work fine. You go to the supermarket, you reach for the brand you always buy, you do not spend twenty minutes comparing labels. That is your brain being efficient. On a trading desk, that same efficiency can cost you real money, because markets are one of the few environments where instinct is systematically exploited.

Amir Tabch's research maps these distortions across three areas. First, the decisions we make in real time - the ones happening in the moment a trade is live. Second, the way other people shape what we believe without us realising it. And third - perhaps most surprisingly - the way our own memories of past markets quietly corrupt how we read the present one.

None of these are beginner problems. They show up at every level.

Decisions in real time

Picture this. You are in a trade, and it starts moving against you. Your first instinct is not to question whether you were wrong. It is to find a reason you were right. You look for an analyst who agrees with you. You notice the chart pattern that supports your view. The signals pointing the other way are there - you just register them as noise.

This is what confirmation bias actually looks like in practice. Not a dramatic failure of judgement - a quiet, almost invisible filtering of incoming information to protect a decision already made. The position stays open longer than it should. By the time the picture is undeniable, the loss is far larger than it ever needed to be.

Something similar happens with price. You buy an asset at $95,000. It drops to $78,000. Now - is $78,000 a fair price? That is the question a fresh pair of eyes would ask. But your brain is not asking that question. It is asking: how do I get back to $95,000? That number has become your reference point - your private benchmark that the market knows nothing about and cares about even less. Anchoring keeps traders tied to a price that belongs to their own history with the asset, not to anything the market is currently telling them. Exits get delayed. Re-entries get mistimed. All because of a number that stopped being relevant the moment the trade was placed.

Then there is the pattern that feels like progress. Three winning trades in a row and something shifts - the setup feels like it is working, conviction builds, the next position goes on bigger. But three data points are not a pattern. They are three data points. The brain finds meaning in sequences because in most areas of life sequences carry meaning. Here, they often do not. The clustering illusion causes traders to act on patterns that do not exist - taking on more risk at exactly the wrong moment, for exactly the wrong reasons.

And underneath all of this, shaping every single decision in ways most traders never fully account for, is the way loss feels. Tversky and Kahneman established this decades ago and it has been confirmed so many times since that it is no longer really contested: losses have a significantly greater psychological impact than equivalent gains.[1] In a live trade that means a winning position up 15% gets closed early - because the thought of giving it back is worse than the satisfaction of the gain - even when the original target was 25%. And a losing position down 15% gets held, because closing means making the loss real, and the brain would rather sustain the uncertainty than accept the pain. Same trader, same week, two decisions that look opposite but come from exactly the same place. Loss aversion is not a character flaw. It is biology. And over hundreds of trades, it produces a portfolio that cuts winners short and lets losers run with remarkable consistency.

The influence of others

Those four biases at least feel internal - your own thinking, your own emotional response to what is happening in your trade. The next group is more disorienting because it does not feel like bias at all. It feels like reading the market correctly.

Everyone who has traded through a strong bull run knows the feeling. An asset starts moving. Volume picks up. The conversation around it gets louder. Getting in does not feel like following a crowd - it feels like recognising something real. But what looks like a real move is often the crowd itself, buying because others are buying, pushing prices beyond what fundamentals alone would justify. Herding is one of the most frequently observed biases in Amir Tabch's research.[2]The 2020-2021 crypto rally, the meme stock surge, every speculative peak you can name - the mechanism is identical each time. Consensus builds, prices disconnect from fundamentals, the reversal is swift, and the traders who arrived because the trade felt validated by everyone else are the last ones holding.

Herding rarely travels alone. It gets amplified by what might be called the halo effect - the way a powerful positive impression of something bleeds into how we evaluate everything around it. During the 2021 bull run, projects connected to prominent founders or heavily marketed ecosystems got bought without serious scrutiny. The halo of the broader narrative made the question feel unnecessary. When those projects collapsed - and most of them did - the losses were concentrated exactly where the enthusiasm had been highest. The halo had answered the question before anyone thought to ask it.

And then there is what happens after the trade closes badly. The internal story shifts almost immediately - the market moved unexpectedly, the timing was unlucky, the setup was sound even if the outcome was not. The loss gets filed under circumstances. A good trade that closes the same week gets filed under skill. Repeat that process for long enough and you end up with a picture of your own performance that is more flattering than accurate - and with no real mechanism for improvement, because the errors were never honestly examined. Self-serving bias does not feel like dishonesty. It feels like context. That is what makes it so persistent.

What memory gets wrong

So far, all of this has been about the present - decisions being made, people being influenced, trades being misread. But there is a third category that most traders never think to question, because it feels like one of their greatest assets.

Experience.

The 2020-2021 crypto bull run, in memory, tends to look like a period of strong directional moves where patience was rewarded. In reality it included multiple drawdowns of 30–50% within the same uptrend, long stretches of sideways movement, and sharp liquidation events that removed many participants before the larger moves ever materialised. The difficulty has faded. What remains is a cleaner, more confident version of events than the data would support. Rosy retrospection means traders calibrate their expectations and risk tolerance to a market that never quite existed - and then find the inevitable difficulties of real conditions surprising, when they are entirely normal.

Memory also has a strange way of editing out the difficult parts. Ask a trader who rode the 2020-2021 crypto bull run what that period was like and most will describe it as one of the best trading experiences of their life. What they will not lead with - and often barely mention - are the 30% drawdown in May 2021, the weeks of grinding sideways movement, or the sharp liquidation events that tested conviction repeatedly along the way. Those moments existed. They were real and they were hard. But the peak was high and the exit was good, so the memory filed the whole period under positive. This is the peak-end rule - the well-established finding that we judge experiences primarily by their most intense moment and how they end, not by its average. The practical consequence for traders is significant: a period that was genuinely difficult to live through is remembered as a template for how markets work, the difficulty quietly stripped out. When similar conditions return - the volatility, the drawdowns, the uncertainty - they feel abnormal. They are not. They were there last time too. The memory just did not keep them.

The most immediate version of all this played out clearly in early 2022. After more than a year of rising markets, the dominant expectation among retail participants was that dips were opportunities - because every dip in the preceding period had recovered. That expectation was not irrational. It was just built almost entirely on recent history, with little weight given to how cycles have ended across longer timeframes. When the bear market came, traders kept buying the dip at $45,000, then $35,000, then $25,000. Not recklessly - confidently, because recency bias had made the recovery feel like the only logical outcome. It does not produce one bad trade. It sustains a series of them, across multiple decisions, because the mental model stopped updating when the market did.

The limits of knowing

By now, the natural instinct is to think: I know about these patterns now. I will watch for them.

It is worth examining that instinct honestly.

Knowing an optical illusion exists does not stop you from seeing it. The mechanism runs faster than the awareness of it. Cognitive bias works the same way - it operates below the level where conscious knowledge can reliably intervene. Amir Tabch's research is direct on this point: awareness matters, but it is not a solution on its own. Confirmation bias persists in people who know exactly what it is and are actively trying to compensate for it.

What actually works is removing the decision from the moment. Rules for exits are set before a position is open, when the emotional stakes are not yet live. A required step in any research process that actively seeks out the case against the trade, not as a good habit, but as a non-negotiable. The goal is not a bias-free trader. That person does not exist. The goal is a process designed around the reality of how human cognition works - one that catches the predictable errors before they reach the outcome, rather than making them obvious only in hindsight.

Trading is often framed as a problem of information - who has more of it, who processes it faster, who acts on it first. But the evidence points somewhere less comfortable. Much of the information is broadly available to everyone. What differs is what happens to it between the screen and the decision. That is where the real performance gap lives - not in the data, but in the mind interpreting it. The traders who close that gap are not necessarily the most experienced or the most technically skilled. They are the ones who have been honest enough to examine the instrument they use most and question it most seriously.

That instrument is not the chart. It is the person reading it.

OFZA's CEO Amir Tabch holds the Master of Financial Technical Analysis (MFTA) designation, awarded by the Society of Technical Analysts. His research on cognitive bias in technical analysis was submitted as part of his MFTA designation through the Society of Technical Analysts.