The market is made up of individual investors, all whom share the same cognitive biases and irrational tendencies. So one might expect that this market is incredibly irrational and filled with flawed prices! Actually, the market can be fairly priced despite this. Known as the wisdom of crowds, the theory states that the errors of each individual prediction tend to cancel each other out. In other words, all of the investors that irrationally guess an inordinately high price are balanced by the investors that irrationally guess an inordinately low price and overall the price can turn up remarkably accurate! If an investor is serious about making good choices with their investments, they must try very hard to set emotions aside and rely on cold calculation and logic to guide them. This is not easy to do.
   Understanding trading psychology is a game-changer in the world of investments. It equips you to navigate the emotional roller coaster of markets, make rational decisions under pressure, and maintain discipline. Ultimately, it enhances not only decision-making but also your overall investment strategies. Embrace the psychological aspect, and you'll likely find yourself better equipped to weather the storms and capitalize on opportunities.