In this life, not everything we like or it doesn't make us like it enough to buy it and sometimes we still buy it without understanding why. So this article will tell everyone about that reason. If you find it interesting, please give me a like and a comment to share your feelings and thoughts!
Coming to our main character "The crowd psychology effect", crowd psychology is a negative psychology not only for investors in particular but also for the general psychology of people. In investing, people are easily influenced by the crowd, causing them to place orders/invest without researching the market or market data. This is the most common and easiest type of psychology that leads investors to risk and lose money.
Some manifestations of crowd psychology:
Buy/sell when the market is rising/falling sharply: When seeing many people investing in a coin, a stock, land, etc., they fear that they will miss out on the opportunity to make money and this is probably the main reason why investors suffer from the herd effect.
Trusting rumors/unverified information: The bright side of human beings is that they easily believe information given by others and especially when many people give the same rumor/information, it becomes more trustworthy (to them).
===> Often happens to new investors, weak or no opinions and sometimes some long-time investors can easily make the same mistake.
So what can we do to avoid/simplify this type of mentality from bothering us?
-> Build a personal investment plan with a specific strategy. Information on the internet is for reference only and be rational.
-> Research the market and carefully analyze the investment project you are about to invest in to gain knowledge and avoid being influenced by the majority.
-> Emotional management: be patient, keep your mind steady in the face of market fluctuations, there may be more heads than one head but remember it is only for reference.
