The Reason Why You Make Bad Choices

Most of us are naive enough to believe we have control over our own decisions.

Truth is we don’t.

We make highly illogical emotional decisions every day.

Most of us succumb to persuasion every single day.

Harry Krishna followers carry buckets of money and walk around handing people flowers. They know that a large % of people can’t accept that flower without feeling the need to put money in the bucket. The idea of just accepting the flower and walking away bothers people. It’s a great way to use persuasion to raise money. It has always worked.

Pepsi knew that paying Michael Jackson millions to hold a can of their drink would skyrocket sales. And it did, sales went up and up and up as a result. People saw that link of association and wanted to drink the same drink MJ was drinking. But they didn’t feel that way until they saw him drinking it.

Near me is a gormet burger restaurant. They don’t allow bookings. You have to turn up and hope to get a seat. If you don’t get a seat you are turned away or you have to queue. Sometimes this queue can last all night and you don’t make it in before they stop serving, meaning you go hungry. Yet people queue up most nights of the week hoping they get in. The food is ok, nothing amazing. But the scarcity the restaurant has created builds a buzz. People are climbing over each other in order to get a seat there. All created by saying “you cant book, and we WILL turn you away”. Now people want those burgers more than ever.

All these are examples of emotion overriding logic. You didn’t intend to donate money, you may not have chosen Pepsi, and you probably would have eaten elsewhere that night.

You took that trade you shouldn’t have because your emotions took over. You closed that trade prematurely because of emotion. The same reason you moved that stop loss further away, because your emotions and fear of locking in the loss were too high to ignore.

Ever done something you regret in the heat of the moment? Looked back and thought “WHY DID I DO THAT???”

Emotion wins every time guys.

Trading success is won and lost here on the battlefield of emotion vs logic.

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