For Business

Trading Psychology

What Is Anchoring Bias

Anchoring bias is a number seen first becoming the ruler for every number seen after it, so that a later price is read as a distance from the first rather than as a price. This paper shows you gold's high of 4381.38 on 20 October 2025 and the low of 3886.61 eight days later, read as '495 off' by one eye and as a price by another; the idea as the was-price on a sale tag; the high left as a line on the daily chart; two arrows to one number; and the horizontal line tool on your platform, where the anchor is drawn by hand.

Difficulty
Beginner
Reading time
5 min
Pages
8
Reviewed by
Saman Rahbar

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A number seen first

Anchoring is a number seen first becoming the ruler for every number seen after it. Gold's high on 20 October 2025 was 4381.38, touched for part of one day and the highest print of the year. Eight days later, on 28 October, the low was 3886.61. To an eye that saw the high first, 3886.61 is not a price; it is 495 off the high, and it reads as cheap. To an eye arriving that morning with no anchor, 3886.61 is a price, the one gold is at. The same number, and two completely different readings of it, because one of the readers has a ruler that starts at 4381.38 and the other has no ruler at all.

The was-price on a sale tag

Picture a sale tag. The was-price is printed large and crossed out, and the now-price sits under it. The shop puts the old number there for a reason: the new number is read against it, as a saving, rather than on its own, as a cost. That is anchoring, and shops have used it for as long as there have been tags. Gold's high at 4381.38 is the was-price. Nobody printed it on a tag; the chart showed it once and the eye kept it, and 3886.61 was read under it, crossed-out number and all. The tag works even when you know how it works.

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