Investment Psychology: FOMO, Panic, and Overconfidence

Emotion vs system

The cortex analyses; the amygdala drives fear and greed. Under stress, emotion often wins.

Three common traps

1. FOMO: Fear of missing out drives unplanned entries
2. Panic: Exits outside the plan
3. Overconfidence: Doubling risk after a winning streak

The fix

Written rules and weekly review turn emotion into data.