Psychologists have written many scientific papers about cognitive distortions and, unfortunately, they exist and can actually cause you to lose money.
Here are the three most dangerous for your deposit:
Confirmation bias – bulls in the market listen to those who promise tazemun and ignore signals for a market reversal.
What to do: Always consider alternative points of view with an open mind.
Survivor's Fallacy - Every trader dreams of becoming successful and therefore learns from those who have already bought Lambo, ignoring the mistakes of the 95% of market participants who lost money.
What to do: first you need to learn not to lose money, so study other people’s mistakes
The recency effect - yesterday's successful trade means more to you than a dozen unsuccessful ones a month ago.
What to do: Resist the temptation to repeat recent success, always use all your experience.
