Investor psychological biases are at the root of stock market mismanagement, affecting investor decision-making and trading performance.
1. All the emotions of the individual in a decision-making situation come from the research field of behavioural finance and impact the rules of conduct and the performance of players and the financial markets, also the human capacity for introspection is limited, which varies from person to person.
2. As in all work environments, investors follow socially accepted standards of conduct, rules, and trading plans (such as money management) trying to control their activity in the financial market. In the final analysis, the question that arises is the following: What are the strategies followed to avoid behavioural biases? and to what extent have machine learning algorithms (particularly genetic algorithms) improved stock price predictions? These queries will be a line of research for future works.
Summary of types and subtypes of behavioural biases and their causes:
Research by Imad Talhartit, Sanae Ait Jillali, Mounime El Kabbouri
