Confidence calibration
Calibration is how well your confidence matches your accuracy — being right about 80% of the time when you say you are 80% sure.
Most people are overconfident in a measurable way: when they say they are certain, they are right maybe seven times in ten. That gap is invisible unless something records the prediction at the time.
It is a better skill to train than stock-picking, because it transfers. Knowing how much to trust your own judgement is useful in every decision where you cannot see the outcome yet.
Good calibration is not caution. Saying "not sure" about everything is just as badly calibrated as being certain about everything — it is accuracy of self-knowledge, not modesty.
In Stoxhatch
You rate each buy from 1 to 5. Over time the journal compares those ratings with what actually happened.
Related
- Investment thesis — A thesis is the reason you are buying, written down before you buy, in language specific enough to be proved wrong.
- Risk — Risk in investing is the chance of a permanent loss, not the fact that a price moves around.
Try it with $10,000 of simulated cash, no signup needed — or browse the rest of the glossary.