Behavioral Finance Simplified📒
🔵Its a study to observe the human behaviour from different angles when it comes to managing the money💰
🔵Its a study to observe the changes in human behaviour (emotional change) when a stock rises or fall📈📉
1/n
#MarketPsychology
#StockMarket
🔵Its a study to observe the human behaviour from different angles when it comes to managing the money💰
🔵Its a study to observe the changes in human behaviour (emotional change) when a stock rises or fall📈📉
1/n
#MarketPsychology
#StockMarket
Behavioral Finance Simplified📒
🔵Its a study to know how psychological biases can affect market outcomes
🔵There are 5 concepts of Behavioural Finance which are
1️⃣Anchoring
2️⃣Mental Accounting
3️⃣Herd Behaviour
4️⃣Emotional Gap
5️⃣Over Confidence
2/n
#MarketPsychology
🔵Its a study to know how psychological biases can affect market outcomes
🔵There are 5 concepts of Behavioural Finance which are
1️⃣Anchoring
2️⃣Mental Accounting
3️⃣Herd Behaviour
4️⃣Emotional Gap
5️⃣Over Confidence
2/n
#MarketPsychology
Behavioral Finance Simplified📒
Anchoring
🔵Anchoring is a cognitive bias in which individuals fix a target number or value usually, the first one they get, such as an expected price
🔵Bias in it influences the investor not to sell despite of bad news in stock
3/n
Anchoring
🔵Anchoring is a cognitive bias in which individuals fix a target number or value usually, the first one they get, such as an expected price
🔵Bias in it influences the investor not to sell despite of bad news in stock
3/n
Behavioral Finance Simplified 📒
Mental Accounting
🔵 Mental accounting refers to the propensity for people to allocate money for specific purposes.
🔵 It changes from person to person basis their lifestyle & earning
4/n
Mental Accounting
🔵 Mental accounting refers to the propensity for people to allocate money for specific purposes.
🔵 It changes from person to person basis their lifestyle & earning
4/n
Behavioral Finance Simplified📒
Herd Behaviour
🔵Herd behavior states that people tend to mimic the financial behaviors of the majority of the herd.
🔵Its something like buy in Euphoria or sell in a panic when the market drops
🔵Its difficult to break herd mentality
5/n
Herd Behaviour
🔵Herd behavior states that people tend to mimic the financial behaviors of the majority of the herd.
🔵Its something like buy in Euphoria or sell in a panic when the market drops
🔵Its difficult to break herd mentality
5/n
Behavioral Finance Simplified📒
Emotional Gap
🔵 It refers to decision making based on extreme emotions or emotional strains such as anxiety, anger, fear, or excitement.
Many often emotions are the key reason for people to not make rational choices specially traders
6/n
Emotional Gap
🔵 It refers to decision making based on extreme emotions or emotional strains such as anxiety, anger, fear, or excitement.
Many often emotions are the key reason for people to not make rational choices specially traders
6/n
Behavioral Finance Simplified📒
Over Confidence
🔵Here an investor tend to rate his knowledge higher than others in a state of overconfident
🔵It seldom leads investors into big trouble
To understand better more plz research more about this topic😊
End of Thread
Thanks 🙏
Over Confidence
🔵Here an investor tend to rate his knowledge higher than others in a state of overconfident
🔵It seldom leads investors into big trouble
To understand better more plz research more about this topic😊
End of Thread
Thanks 🙏
Guys i am working on theory which is based on emotions only
Will share once it is finalised
Will share once it is finalised
