📖 Biases you need to avoid if you want to succeed in the investing game, and how to mitigate them

🔹 Confirmation Bias: Tendency to search for, interpret, favor, and recall information in a way that confirms one's preexisting beliefs. In investing, this can lead to focusing only on information that supports your investment decisions and ignoring information that contradicts them. Especially in cryptos, this will likely REKT your portfolio.

🔹 Herd Mentality: This bias is the tendency to follow and copy what other investors are doing. If they're bearish, you turn bearish. If they're bullish, you turn bullish. Or at least, you will be extremely confused, enter analysis-paralysis, and rarely come up with the best investment decision.

🔹 Anchoring Bias: This bias occurs when investors base their decisions on irrelevant figures and data. For example, an investor might hold onto a losing coin because they're anchored to the price they originally paid for it. Set realistic targets, and account for your decision to potentially be a failed investment. If it is, cut your loss before it reaches -90%. Fail and learn, fail better, and you'll eventually start achieving better results.

🔹 Loss Aversion: This bias refers to the tendency to strongly prefer avoiding losses over acquiring gains. Some studies suggest that losses are twice as powerful, psychologically, as gains. This can lead to poor investment decisions, such as holding onto losing investments for too long in the hope they will rebound, and with how speculative cryptos are...that's usually the worst decision one can make. Here is where fundamentals matter, and coins that have been in the market for several years aren't to be ignored. If herd consensus is that X coin is "dead", it might be something just temporary (not permanent)

Avoiding these biases can help an investor make more rational decisions, thus ending up with better results. However, completely eliminating these biases is nearly impossible because they are deeply ingrained in our psychological makeup. We can mitigate these biases.

🔹 Confirmation bias: Seek information that contradicts your beliefs. This helps to challenge and test your assumptions.

🔹 Herd Mentality: Stick to your investment plan. Don't get swayed by market hysteria and irrational behavior of others. CT is mostly a brainless space.

🔹 Anchoring Bias: Focus on the intrinsic value of investments, not just the price you paid for them. If you bought at a quite higher price, it means you've accepted to play the game, so you should DCA and reach the best average price possible on your investment. Notice how much harder it is to buy when the market is down Vs when is up? That's why most people buy at very high prices, and panic sell, or at least not buy more at much lower prices. Keep in mind that 95% of all cryptos are useless and sooner or later they will lose -99.99% of their value. Play the mid-term swings and convert the profits in established stocks & cryptos.

🔹 Loss Aversion: Understand that losses are a part of investing. Make sure to assess investments objectively, even if they've lost value.

There's millions of people out there playing the game all wrong. They are paying their money into the pockets of the few thousand people who play it right. This will not change.