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Investing Psychology

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Super Contributor

Who here is interested in behavioural investing? Basically the psychology of how investor's minds work, our own minds, and how it effects our investment operations? This is something I am deeply interested in and think if we explore our biases and weaknesses we can increate our effectiveness and profits. What is the general view on the psychology of investing in this forum?

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Contributor

Certainly interested in it, having read 'Trading in the Zone' by Douglas a few times. 

 

Not sure if that is the type of investing psychology you are referring too? as that is more about self-management and lack of discipline getting in the way of trading success, but definitely delves into how traders/investors think and behave.

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Super Contributor

Thanks for the reply, I havent read that book but I am thinking we are probaby speaking of the same thing. Behavioural Finance is a very interesting topic and I think so many people can learn about their weaknesses through a small understanding of the biases involved. If one knows what ones weaknesses are then one can build strategies to overcome these and perform so much better! I thought it would be great to start a discussion about this stuff so trying to find the people that might find it interesting!

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Contributor

I would not be sure how to build a specific strategy taking advantage of other traders weaknesses and biases. 

 

Best thing I have found is just to manage oneself, as that is all you have control of in the markets, and by doing so you inadvertantly take advantage of other Traders weaknesses/biases.

 

As I have said previously, not sure if we are talking about the same thing, maybe you can elaborate a little on your views/what you mean?

 

 

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Super Contributor

Hi Stus, i am sorry for the intermittent responses, but I will explain this shortly, I think one can use behavioural finance in an applied manner to gain some interesting insights, but I am working this way out still and will let you know soon. Also working on a cool tool that will help us investors gage our susceptability which might be very interesting! will keep you guys posted!

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