Tricks to making money to avoid losses in the stock market please read and understand the share market strategy. Today I will tell you how if you invest in any stock market then you have to take care of these things before investing in it. I will tell you about some human psychology. Let me tell you about some of the stock market human psychology.
Psychology Of Stock Market
Here you see that there are 2 lines. Just answer a small question, which line do you find bigger. You would say, sir, is this a point to ask? The bottom line is bigger and it is bigger, Your brain said, it still looks big. But I'll just prove this because I drew the line for you guys just so that I can show you what these lines are, it's the same.
Let me show you that their length is the same, see this, their length was the same. But why did you think that the bottom line is bigger, today you are going to learn Human Psychology? And this human psychology will be useful in your life and also in the share market and you will know why people make mistakes then this phenomenon called Mental Heuristics.
Now, this mental heuristic is not good for you most of the
time because it means that your mind does not want to spend much time
processing information. It doesn't look once but it immediately judges, as I
said that which line is bigger than your mind did not draw such lines like this
that you think that such lines can also be equal but It just passed judgment
once and by seeing from above that bottom line is big and now how these people
use adversely in share market for themselves,
I will tell you that when our mind does not want to process
information. People don't see the financials of the company and they didn't
even see the balance sheet and they don't even judge the past performance of
the company,
Share market strategy
They just saw that this stock is looking nice and they
judged once and we pick the wrong stocks and then we face losses and we don't
spare time for technical analysis because that information has to be
processed in the mind and that is a tiring process for the mind.
And because you will not put mind and you will not invest
time and you are conditioned that is not your mistake, your mind is conditioned
that it doesn't want to give time, but you know that if we can make mistake
then we don't have to make that mistake and from here we come to the next
phenomenon and which we call sunk cost fallacy, now what does it mean,
Best Example Stock Market
now I give an example to you that first, you think for
yourself that you are going somewhere 200 km away from your home and you feel
hungry on the way and you are driving. Now you feel hungry and you drive and
you stop at a takeaway restaurant and example you stop at a McDonald's and
there you order your favorite burger and you say that make a meal and you put
french fries in it and also put coke and.
you get your meal there and you take your meal and you put it in the car and you are driving and when you are driving then you pick the coke and you drink it and you feel that there is no fizz in it and it is feeling like that it is water, there is just sugar mixed in the water and that's it, you are not getting the flavor of the cock and then you put your hand in french fries and you think that they are dried and they are not crispy at all then you think that Burger will be fine.
And you pick up the burger and when you pick the burger then
you think that it is feeling that it's just kept then you don't have that much
fun, you did not get that much taste and that much crispness and now what you
will do, my question is what will you do.
You have given ₹500, you can drink coke, and you can also eat french fries but
it is not crispy and you have taken a burger and that is not much good but
still you can eat, what to do. Most people will not throw it, and they will not
throw that food away and they will say that we have ₹500
and we will eat it and because people eat then they think that money has gone
now and Money is drowned and what to do now, now we will not throw it,
we will utilize it and take one more example that you go to a
movie theatre and that is not your favorite movie and you sit inside with your
family and you have taken everybody tickets, now while watching the movie you
say what a bad movie, no story, no fun, Absolutely boring,
what you will do, will you come in between from there and
you will say that we will not come and we will not come because there is a signal
in your mind that you have spent your money and your mind is saying that you
have spent money then even we took the air of AC for 3 hours, but we will sit
there and if you even abuses after that what a bad movie it was.
But still, you will not leave in the middle. Money has sunk
but still, you guys are engaged in it and This is what happens in the stock
market. We buy shares of the companies from which we are getting lost but if we
are getting loss then we bear more because I give you an example of it and you
will understand.
That your loss is happening and in the shares, you get the profit
you don't stop for that and you don't wait for profit and you get profit and
you booked profit and you sold that if it will fall then, we purchased share on
₹100 and it becomes of ₹120 and we got Profit and we booked profit because if come
again on ₹110 then we can get lost, so we booked profit
here.
But when we are getting losses there then we wait for the
loss because we invested money, so you wait and you don't take action in
between that, just like you did not come out between the movie then until the
share will grow, it is there, but you did not think that at the time of profit
and again you are using this human psychology for you in a reversing way, but
If you can understand it then you can also use it in your favor and the third phenomenon is loss aversion, now what is the meaning of loss aversion that we human beings, whatever happens, but we can't tolerate loss, and we have pain in loss and we get pleasure in the profit and we get happy from Profit, but let me tell you that if you get 1X happiness on profit then you have 3X pain on loss, and you can tell me in the comments that it happens or not, it definitely happens.
When there is a loss, it is very bad for the brain that I
have a loss and what do people do to protect against this loss, let me tell you
what people do, suppose you purchased a share for ₹100
and now it decreased and it becomes ₹95, and
Suppose there is a loss and now Suppose you purchased ₹1000
quantity of it, then here you invested one lakh and it becomes ₹95000, then there is a loss of ₹5000
and what people will say that they think in the mind that there is a loss of ₹5000 and we have to prevent it then we have more money.
Then we again buy 1000 shares in ₹95000,
so our average will increase and it means that the average will not be ₹100 and it will come to 97.5, and whatever your average will
come then it will average out. This means that even if the stock reaches 98, we
will still make a profit. Now it won't, Now let's say it went from here to 90,
then if still, we have more money even then we purchased more than our average
is out and it comes around 95 or 96 comes,
Then even if it comes to 95 of 96 I will not book a loss, but I will come out with a profit and in the share, you were getting lost, you kept on investing money in that and you kept investing money in that and you don't do in which you get the profit that I purchased it on ₹100 and it becomes of ₹120, now I will not buy it, it has increased a lot.
But when it is drowning, then money was constantly spent, and
this is called loss aversion. Now only in the share market, but you can see
these phenomenons in your daily life and you do it now if you understand
the principles of human psychology. cryptoanalysis
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