Base rates, anchoring and the number you saw first
The market price is an anchor. Noticing that is half the work.
5 minute read · updated with the phase that shipped this page
When you open a market and see 12%, your estimate wants to become "somewhere near 12%". That is anchoring, and it happens to experienced people too.
A defence that costs nothing: write your estimate down before you look at the price. If the market is far from your number, one of you is wrong, and it is worth knowing which before you trade rather than after.
Base rates are the other half. How often do bills like this pass? How often does a team leading at half time win? How often does a coin that has been above $90,000 stay above $90,000 for a month? Historical frequency is not destiny, but it is a better starting point than a feeling.
The research journal in this product exists for exactly this: record the estimate and the reasoning before the outcome, and let the record argue with you later.
- Did I write my estimate before I saw the price?
- What is the historical frequency of this class of event?
- What new information, specifically, justifies my number being different from the market's?
Educational material only. Qvicom Signal is not a broker, exchange or adviser, cannot place orders, and does not accept deposits or wagers.