Some cognitive biases to be aware of as a (crypto) investor

Our mind is not perfect. Actually, it is quite easy to trick our mind, since it has certain behaviors which, if we aren't aware, we cannot avoid. As investors we have to be aware of certain cognitive biases to avoid them when investing. Here there are some of them:

Herd mentality

Investors tend to follow and copy what other investors do.

We are influenced more by emotion and instinct than by our own analysis.

In many cases, FOMO is due to the herd mentality

Recency bias

We overvalue recent information and events

This can lead to very bad decisions

It is relatively easy to avoid it by zooming out

Whole coin bias

People prefer to buy a whole unit of a token, rather than a fraction.

This can discourage small investors from investing in the safest options (BTC/ETH), as they cannot afford to buy a whole one.

Do not overvalue the value of a token because it is cheap

Tend to follow the leader

It's a natural tendency

Normally, we believe everything the experts say

BUT:

-Experts can be wrong, they are human

-Experts may have ulterior motives, especially if they have a large audience

Narratives

We love stories, they move us. In many cases we can feel identified with them

There are coins that explode for story/narrative, especially shitcoins, but also projects that seem solid

Succesful minority

"Someone turned $100 of Doge into millions"

Many people have followed this path hoping to do the same

You don't hear about the hundreds of others who turned 100k into 1k

Everyone prefers to talk about the winners, and this skews your perception of the odds.

Emotional attachment

We become emotionally attached to our bags

We place a higher value on an investment because we own it

Ask yourself how good would be that asset if you didn't invest on it

Anchoring to the first info

Excessive dependence on the first information you have.

You have heard of ETH at $100 and you missed out. Then it explodes to $2000.

Now you don't want to buy it. It's too expensive in your head.

Evaluate it based on its potential, not its past

Listen only to what I like

You're only looking for information you want to hear.

You only follow bullish people

And you block those who spread a negative opinion

If your DYOR, you will know what is FUD and what is not

Please, if you have other ones, leave it in comments

Hope this post helps