The Biggest Risk to Your Investments Is You Yourself — from “The Behavioral Investor”
In the world of markets, we tend to think that the person with the best chart or the most advanced technical analysis wins. However, psychologist Daniel Crosby says in his book The Behavioral Investor that psychology and emotional control determine 90% of long-term success.
✅Trading and investment decisions.$BTC
⚠️Ego: we mistake a bull market for proof that we can predict exactly what a chart will do, which leads us to make fatal mistakes, such as ignoring risk management.
⚠️Familiarity bias: people resist changing their opinions in the face of scientific or market evidence. What’s familiar feels comfortable, even when the fundamentals show you a collapse is coming.
⚠️(The tyranny of the news)
The brain makes calculations amid uncertainty, doubt, and fear. It makes decisions without looking at cold historical data.
🚨Emotion: we confuse comfort with safety. This leads to destructive behavior, so pay attention: ⚠️buying at the peak of euphoria and selling at the bottom of a panic, when you’re hurting.
🎯The neurology of money
The pain of a real loss: suffering a major financial loss activates the brain just like physical pain or a threat of death.
So you flee the pain, and it pushes you to liquidate your position at the worst possible moment.
⚠️Addicted to gains: quick profits activate our dopamine just like a highly addictive drug. Our thinking becomes clouded and creates gambling behavior and risk-taking.
🚨And here’s the most important part!!
Crosby creates a foolproof system🚨
Fight primitive impulses by replacing intuition with automatic rules.
Less activity, but more effective. Trading too much increases the noise and leads us to make emotional mistakes. Less is more💚
✅Discipline beats intelligence. Winning means delegating to a mechanical system of your own design and sticking to it.
We eliminate the need to think and trade when the market is nervous or euphoric.
⚠️Control your environment
This is key, friends🚨
Never chase price noise minute by minute.
Too much information doesn’t make you perform better; it makes you worse.
This book blows your mind💚💚
In the world of markets, we tend to think that the person with the best chart or the most advanced technical analysis wins. However, psychologist Daniel Crosby says in his book The Behavioral Investor that psychology and emotional control determine 90% of long-term success.
✅Trading and investment decisions.$BTC
⚠️Ego: we mistake a bull market for proof that we can predict exactly what a chart will do, which leads us to make fatal mistakes, such as ignoring risk management.
⚠️Familiarity bias: people resist changing their opinions in the face of scientific or market evidence. What’s familiar feels comfortable, even when the fundamentals show you a collapse is coming.
⚠️(The tyranny of the news)
The brain makes calculations amid uncertainty, doubt, and fear. It makes decisions without looking at cold historical data.
🚨Emotion: we confuse comfort with safety. This leads to destructive behavior, so pay attention: ⚠️buying at the peak of euphoria and selling at the bottom of a panic, when you’re hurting.
🎯The neurology of money
The pain of a real loss: suffering a major financial loss activates the brain just like physical pain or a threat of death.
So you flee the pain, and it pushes you to liquidate your position at the worst possible moment.
⚠️Addicted to gains: quick profits activate our dopamine just like a highly addictive drug. Our thinking becomes clouded and creates gambling behavior and risk-taking.
🚨And here’s the most important part!!
Crosby creates a foolproof system🚨
Fight primitive impulses by replacing intuition with automatic rules.
Less activity, but more effective. Trading too much increases the noise and leads us to make emotional mistakes. Less is more💚
✅Discipline beats intelligence. Winning means delegating to a mechanical system of your own design and sticking to it.
We eliminate the need to think and trade when the market is nervous or euphoric.
⚠️Control your environment
This is key, friends🚨
Never chase price noise minute by minute.
Too much information doesn’t make you perform better; it makes you worse.
This book blows your mind💚💚