Behavioral finance and decision discipline

1. First identify four types of bias

Loss aversionLead people to hold losing positions;Confirmation biasLead people to only seek evidence that supports their view;Recency biasMake recent market moves look like they will last forever;Overconfidencewill mistake luck for skill.

2. Turn willpower into process

1. Write down assumptions, valuation range and failure conditions before placing an order.
2. Set a cooling‑off period to avoid chasing prices after single‑day news.
3. Review on a fixed schedule rather than only opening the account during volatility.
4. Record information available at the decision moment to avoid ex‑post rationalization.

3. Make tools into guardrails

用Position sizing toolPredefine losses, useRebalancing toolReduce buying highs and selling lows, then write the results back into your investment checklist.