Guides · Easy money, trading and scams: the truth
Which psychological biases make investors lose money?
In short: The most costly: overconfidence, confirmation bias (only reading what proves you right), loss aversion (holding a falling stock to avoid "realising" the loss) and herd behaviour.
Overconfidence
After a few wins, you think you have found a method. Luck often explains those beginnings, hence the need to test over a long period.
Loss aversion
A loss hurts about twice as much as a gain of the same size feels good. Result: people sell winners too early and keep losers too long.
Protecting yourself
Write your rules in advance, automate contributions, record every decision and reread it. The "play against the AI" game on the site shows how hard guessing is.