This is only possible because our brain uses shortcuts to process data and information automatically. Unfortunately, those shortcuts don’t always work in our advantage and especially trading and investing require a different skill set and way of thinking.
The automation of thinking and making decisions is done through psychological biases or heuristics. We compiled a list of the 17 most common biases and heuristics and show how they influence trading decisions.
“This is the essence of intuitive heuristics: when faced with a difficult question, we often answer an easier one instead, usually without noticing the substitution.” – Kahnemann