Investors take too much credit for their successes and less responsibility for their losses.
Therefore, an overconfident investor tends to become more risky than his ability could ever actually sustain. Moreover an overconfident person trades too aggressively, therefore increasing trading volume and market volatility. Having success with such overconfidence is invariably due to luck, not skill, or at least limited skill. People usually trade for both cognitive and emotional reasons. They trade because they think they have information when they have nothing but noise, and they trade because trading can bring the joy of pride.