* Definition of overconfidence
In business or trading, an overestimation of one's abilities and of the precision of one's forecasts. Overconfident people set overly narrow confidence intervals in making predictions. They tend to overweigh their own forecasts relative to those of others.
The self-serving attribution bias, under which individuals attribute past successes to their own skills and past failures to bad luck, can lead to overconfidence.
In the context of financial markets, the confidence of a self-attributing investor increases when public information is in line with his or her forecast, but it does not decrease as much when public information contradicts his or her forecast. The investor therefore gains excessive confidence over time, after receiving different confirming and disconfirming public news.
A similar cognitive bias, illusory superiority (or the above average effect), also causes people to overestimate their own abilities. Evidence of this bias is documented in studies that ask subjects to assess their abilities - indeed, a vast majority of people say they are above the average.

* Hindsight bias
Hindsight bias, also known as the knew-it-all-along effect or creeping determinism, is the inclination, after an event has occurred, to see the event as having been predictable, despite there having been little or no objective basis for predicting it, prior to its occurrence. It is a multifaceted phenomenon that can affect different stages of designs, processes, contexts, and situations. Hindsight bias may cause memory distortion, where the recollection and reconstruction of content can lead to false theoretical outcomes. It has been suggested that the effect can cause extreme methodological problems while trying to analyze, understand, and interpret results in experimental studies. A basic example of the hindsight bias is when, after viewing