Confidence versus overconfidence: where's your line?

Confidence trades the plan; overconfidence trades the feeling. The line between them is usually invisible until a losing streak draws it.

Confidence versus overconfidence: where's your line? — risk-reward diagram
A risk-reward ratio of 1 to 2

How do you tell the difference?

  • the internal signals that you've crossed the line
  • the external checks that catch it
  • the overconfident stretch you'd undo
Confidence versus overconfidence: where's your line? — drawdown and recovery diagram
An equity curve during a drawdown and its recovery

The expectancy guide grounds confidence in numbers instead of mood.

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