Too Long; Didn't Read
A common feeling among retail traders is that they seem to always make the wrong trade. They buy at the top, sell at the bottom, and always leave the market feeling scammed or tricked. Time after time, they make the same mistakes and become increasingly skeptical of the market’s legitimacy. This occurs because retail traders are largely unaware of the behavioral biases that govern their <a href="https://hackernoon.com/tagged/investing" target="_blank">investing</a> behavior. Understanding our natural tendencies and how they affect our investing behavior is an easy way to make better trades, and move against the prevailing market sentiment in order to act profitably. Drawing from theories in behavioral economics, decision theory, and <a href="https://hackernoon.com/tagged/psycology" target="_blank">psychology</a>, I will go through some of the common biases that lead to suboptimal trading behavior.