1️⃣ Availability Heuristic: If you constantly see news about meme coin surges, you may overestimate your chances of similar success. In reality, there are very few such stories — most lose money.
💡 How to avoid: Bet on facts and statistics, not on rare success stories. Sensations stay in the headlines but do not reflect market reality.
2️⃣ Clustering Illusion: Our brain looks for patterns even where there are none. You may see 'trends' or 'signals' in random price fluctuations, leading to decisions based on false patterns.
💡 How to avoid: Be skeptical of 'obvious' patterns, especially on short timeframes. Use proven methods and look at a long horizon.
2️⃣ Status Quo Bias: We prefer to leave everything as it is, even if changes could be beneficial. 'Let it sit, maybe it will grow back'. Or 'Why rebalance the portfolio, everything is fine as it is'.
💡 How to avoid: Regularly review your portfolio and strategy. Ask yourself: 'If I didn’t own these assets, would I buy them now?'. If not — it's time to change something.
4️⃣ Disposition Effect: We are more willing to take small profits to feel satisfaction and postpone realizing losses to avoid admitting mistakes. As a result, we take a small gain and a large loss.
💡 How to avoid: Set clear profit and loss taking levels in advance and stick to them regardless of emotions.
5️⃣ Hindsight Bias: After an event, it seems to us that we 'always knew it'. 'I told you Bitcoin would fall!' or 'It was obvious that this Altcoin would surge!'. This distorts our perception of past mistakes and hinders learning from them.
💡 How to avoid: Keep a trading journal, recording your thoughts and reasons for each trade BEFORE making it. This will help objectively analyze your decisions and learn from real experiences.