I see a psychological effect that we often fall into, and those who experience it should comment to share their feelings to see if they are similar to mine. The main topic today is the psychological effect "Anchoring Effect." Why is it called the anchoring effect? It is a psychology where when someone encounters a new concept, they tend to believe and tie themselves to the first information they receive. It is likened to an "anchor" fixed at a point; if this psychological effect strongly influences them, it will be very difficult to shake their thoughts and beliefs about that concept.

In investing, this psychological effect can easily blind investors when faced with a multitude of data and makes it difficult for them to gather and combine data to gain a correct understanding of the market.

Here are some small examples for everyone about this psychological effect:

When a coin reaches a peak of $100 and goes down, investors buying at $60 may take profits when the price rises to $80, but due to the anchoring psychological effect, they still hold on, waiting for the price to return to $100 despite the market showing signs of decline.

Investors often use market indexes (Industry average index) as an anchor when assessing the value of their company's stock without considering the specific situation of the company. Relying solely on general indexes sometimes leads investors to make incorrect assessments of actual potential.

When hearing positive forecasts from experts or reliable sources, investors may use these forecasts as "anchors," making it hard for them to change their opinions even when faced with contrary information.

===> The effect has two negative directions >< positive, but positive is less and negative is more.

Positive in what way? If that "anchor" allows people to profit, they can reach the shore.

Where is the negative? The negativity also follows the above idea. As mentioned above, this can be a good thing, but it only has short-term value; profit comes from the information received earlier and luck when there is no change in information. There is no information that is 100% correct; if someone thinks that "there will be some information that is 100% correct," then I must say that "that person is too inexperienced in the market." And this effect affects almost everyone without them realizing it, both in everyday life and investment psychology.

===> So how to fix it:

-> I often use this method to keep myself in the most objective state: "All information I receive is just for reference, to listen and know, to filter information to keep, not to retain everything."

-> Analyze the market, filter information data before investing in an item.

-> If there are any other ways, I hope everyone comments so I and others can learn! For now, this is all I can think of! Thank you, everyone!