Speculative mentality

Six will lose money on the speculation


This paper discusses six common psychological effects of the stock market, namely the average error, "scapegoat" of the gamblers effect, the tendency of the least painful, not the rule of law and information infatuated with. These psychological effects of the only result is a loss to investors, if seen from the shadow of their own, then the best way is to remove it quickly.

Average error

Please do a test that, in the following four options, the choice that best suits your own one:

A, I highly sophisticated intellectual, far better than the majority of the people;
B, and my intelligence is not particularly good, but the middle-level;
C, my intelligence is relatively weak, which could be considered lower-middle-level;
D, I am very bad intellectual, far weaker than most people.

The vast majority of people will choose option B, since the overwhelming majority of the people are the middle-level intelligence, then what is the average level? Average fallacy lies in the fact that the majority of people will consider themselves higher than the average level in a survey, 82% of the people think that their own driving skills than the average level higher, it is clear that many of them are wrong. This fallacy more exaggerated in the stock market, because everyone bought shares that they are able to earn money, no one will believe that he will lose money again to invest in stocks, and the majority of their profits are expected to outperform market In fact even the majority of funds failed to outperform market.

Overly self-confident people who would normally frequent performance for the transaction, when the buy sell, they have access to information on the accuracy as well as their own judgement are very confident, economists had studied specialized brokerage accounts household data, they found that higher trading volume and could not generate a higher return, in fact frequent trading of lower average returns, because they regarded profit contribution to the commission and stamp duty.

"Scapegoat" effect
In the stock market, the best scapegoat is the so-called "Makers", as long as the loss of any money that bookmakers too bad, bookmakers too cunning, it seems that this will be able to reduce their own responsibility. In fact this did not Makers said that, in Dow Theory assumptions, we have already discussed this point, may be found in previous articles, not repeat them here.

Also reflected in the scapegoat, if a person bought a stock, and then the market fell, he said to himself: I did not buy the wrong stocks, but the general trend in itself bad, it is not my problem, because the other stocks also dropped. So he stops time and again to give up, the final loss would be much Bixiangxiangzhong large.

Gamblers effect

In the casino, under which the most vulnerable gamblers big injection? The answer is two, one is already making a lot of money gamblers; the other is a lot of money has been a loss of gamblers. The former thought: Since I have already earned a lot of money, that I am very good luck, or I am particularly clever, but, since the money was earned even though some also Kuidiao okay. Because he seems to be playing other people's money, not his own money, so more easily under the Note. The latter thought: I have so much money, if not Fanben approach, it really light losses, so I would also like to bet on any event, but also on more pressure, so I can Fanben hope.

The most harmful Fanben idea is the idea, the deficit has been a lot of friends most of the loss, but also think about the final point all capital boost pressure, and the results did not suspense, in addition to more losses will not be any other result. Members of the Futures Exchange have been done a survey, they found that all of the people lose money in the morning and afternoon is more of a gamble, but the results are most Yude more.

If a gambler to win or lose a lot of a lot means that he has been bogged down in this fastidious, and the small profit or a small detached lose much of the people, so the people who were trapped often thought: If the shares rebound I to the purchase price, I will sell well, no longer playing a game.

Tend to minimize pain

Tend to minimize suffering relatively simple, all in the bottom Gerou of the investors have the tendency to such an interesting, or not throwing, once in a day will have to throw all of the losses were to throw stock, usually 10 minutes all within a polishing. Ask a secure unit because not exciting things, if there are five secure-on-hand stock, dished out five points, it also means suffering, there were five. If one day, trapped within a five shares all polishing, then only one suffering, the suffering of the latter is obviously much smaller. If the majority of people are on the market think so, then this day is the day sharply plummeted.

The law does not rule

Russian physiologist Bafuluofu made a famous conditioned reflex experiments, in Pakistan's first experiment rattles give the dog food, dog food will be saliva secretion, so repeatedly. Thereafter, as long as the dog hear voices 1-2 seconds after the start saliva secretion, and it has the ring linked to the food. This experiment many people are aware, there is no wonder the. Here I would like to introduce the other is a conditioned reflex.

Harvard University psychologists Skinner (BFSkinner) made a feeding pigeons on to the experiment. He completely random way to feeding pigeons, after a period of time, he found amazing things, these pigeons has turned into a "crazy." Some pigeons will be facing a specific direction shaking his head, and kept some of the old anti-clockwise, somewhat like the general Zhonglexie dance. Pigeons are slowly because each developed their own conditioned reflex system, seems to think that so long as we continually repeat an act, we will get food, in fact, be truly food, so this act has been further strengthened.

In human society, similar to the phenomenon of an endless stream, everyone is a bit small and superstition, for example, take care not to walk the dog feces stepped will said to myself: ominous! So one day in fear of the wretched, is not encountered slightly smooth things will be said: Aya, indeed fulfilled! This is in the stock market, particularly, a person get up in the morning and found eyelid in the jump, I thought Is today or? Open really dropped after that, then quickly sold, as always in the stock market fluctuations, or if he should be considered, it will be down. It also strengthened his original idea that dancing is definitely not a good thing eyelid.

All of a senior intelligence, the brain is that the original design in order to find a law, and extract the simple laws. For example, do not eat cooked food vulnerable to parasites, red apple is a sweet, bitter all the best things quickly Tudiao and so on. These simple rules are basically correct, it is because these laws are behind the logic is quite simple, but the problem is once encountered a very complicated matter in trouble. Pigeons will not think of dreaming, they still will face this abnormal psychologist, would be fed a random manner, which no law can be, but biological instinct is to go to find the law and then develop a respective sets of strange behaviour. The same is true of our humanity, the complexity of the stock market Change far more than we encounter in life anything can, so each of us is also developing a strange superstition. For example, a certain stage in the stock market will be even garbage stocks rose to heaven, but great gains, so some people summed up, buying stocks on the losers should refuse to buy the "truths", this can be a really Wuheaizai. This also proves one thing, the human brain naturally variable problems and their failure to do more thinking, as long as more than one variable, we immediately confused, and this is the significance of the research, the complex world refined into simple theorem.

Enamored of information
Suffering from information infatuated with the people of interest to all information, whether it is hearsay companies, the Government Notice, terrorist attacks, the killing of Saddam Hussein and so on, that all the news will affect share prices to some extent, and indeed shares in the daily fluctuations, it really looks to the impact of the stock. Information infatuated with the disease are often arbitrary increase irresponsible media, because the media is the rice bowls of information on trafficking from, he will竭力any information that is valuable to some extent, is the so-called double the Wangpo can only say that their own melon sweet. This inverted Fortunately, I am afraid of the media in order to attract eyeballs deliberately distorted news, in the modern society that seems to have become a common phenomenon that a person is obviously means, the media quoted out of context to immediately become the opposite meaning. If investors are concerned about such information Narita, it must be to play in the round, the news is often done in accordance with a decision, then that the news is false, the media began later dismissed. For the media, this strategy is pretty good, at least twice attract your eye, but you wrong information because Yunuo money, the media may responsible for compensation. Because the media always likes preference comment on current affairs, the media tend to exaggerate the market usually dominated the wrong mood, for example, in a bear market bottom is the most pessimistic about the media, and in the top of the bull market in the media is the most optimistic. This phenomenon perhaps, ancient and modern.

Especially when we entered the information age, access to information incredible low cost, the vast majority of all information is noise or spam, Narita listen to the noise, and sooner or later will be their ears to engage broken. In fact truly useful information as long as 12 would be sufficient. But it is difficult to be difficult in the complicated information from the ocean to find that two useful information.