1. Giving in to fear and greed
Emotions cause you to flee a bear market and plunge head first into a bull market, acting directly counter to the investment adage, 'buy low, sell high.'
2. Being overconfident
People with an inflated sense of their ability to make smart investments often take shortcuts and don't fully think decisions through.
3. Looking backwards, not forwards
Тhe investors often have a bad habit of dwelling on the past, and talking about market developments as if it was obvious what was going to happen. The reality is that it's never obvious.
4. Relying on data mining
"Data mining" means studying historical market patterns and using them to try and predict the future. As seasoned investors know, making any kind of prediction is impossible.
5. Anchoring
That's the practice of mentally locking in a stock that has become irrelevant. It doesn't matter that a stock you bought at $30 is now trading at $10. It's no longer a $30 stock. Embrace that reality and realign your approach accordingly.
6. Doing mental accounting
Investors often fool themselves into thinking that they're doing better than they are. It's human nature. So it's important to keep track of how you're doing on paper, not in your head.
7. Sticking with the status quo
We have a natural aversion to change that can get in the way of successful investing. In order to be successful, you need to be able to recognize when things aren't working, and adapt accordingly.
Read more:
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Disclaimer:
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.