It has been established that 80% of stock investors, invest based on rumors and not on real and true facts. Ignorance is a major reason why many loose money in the capital market. The world best investor said that he cannot invest in a stock that he does not know their product. 

How then can you win in a battle that you are not well informed?

Despite the rise of computer transactions over the past two decades, humans and human decision making still underpin the billions of transactions that take place on the stock market each year. This is particularly the case if you're seeking to invest at home, where you'll have a direct relationship with the trades you do. 

One thing that might affect this is our fundamental psychology as human beings, our human nature. In the following article, I'll talk a little bit about how investor psychology is particularly important to understanding the machinations of the stock market, and traits you should be self aware of when trading.

The major potential flaw of our shared human nature is the fact that we are all loss averse when it comes to investing our own money. Take the following scenario for example: you can choose between two alternatives, one situation where you have $90 and make $10, or another situation where you have $110 and lose $10. If you're like most other people, you'll choose the former even when you should be equally indifferent to both of them. Now, applying to investing situations that you're likely to encounter, the tendency to be loss averse will cause you to act irrationally when facing stock that's gone down in price. You're more likely to hold on in the hope that you can atleast recouperate your outlay, though this might be a flawed position to take.

The best way to counteract and overcome our human flaws is to be self-aware. By recognising that we all possess them, you are able to identify situations which might need more due diligence. It also helps to have a plan or guide to stick to. Deviating from specific targets and conditions of when to buy and sell, you're more likely to make the right decision. It's not as easy as that though; if every transaction was simply a quantitative one then it could be done entirely by computers. It can't, and that is because there are qualitative decisions to make: how investors might react to the news of one sector that might be completely unrelated for example.

The Stock Market is a place where many millionaires are made. its a place where the principle of taking from those that do not have (The poor and the not too Rich), and give to those who are already rich or extremely rich applies. People do not just loose money in the Stock Market for no just cause or reason. 

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