As humans, we love to stay consistent with our past decisions even when they’re wrong. This is known as Commitment and Consistency Bias, a cognitive shortcut where we subconsciously justify and stick with previous choices to avoid the discomfort of admitting...
The Decoy Effect is a well-documented psychological bias that subtly manipulates decision-making by introducing a target option that makes one of the other choices appear significantly more attractive. This subtle manipulation was first introduced in a 1982 study as...
The contrast effect is a cognitive bias where our perception of something is influenced by what came before it. Humans are particularly susceptible to this bias, especially when it comes to how we perceive stock prices and value. You would think a bottle of wine that...
The House Money Effect is a psychological bias where people treat money they’ve recently won (or earned easily) as less valuable than their original capital. This leads to riskier decisions like a gambler taking bigger bets after a hot streak. This cognitive bias,...
The Chaikin Money Flow (CMF) is a volume-based trading indicator developed by Marc Chaikin. It measures the volume of money flow into or out of a security over a given trading period, typically 21 trading days. The core principle behind CMF is that when closing prices...
