Optimism Bias | Important Thing We Should Know

ramadhanight in LeoFinance • 7 months ago

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Hello everyone, welcome back to Ramadhanight's Hive Blog. Optimism is important to help us motivated and couraged to keep going and chasing what we aim, but there is called Optimism Bias that could lead us to a misserable fails. What was that and how Avoid it ? Let's talk about it !

What is Optimism Bias

Optimism Bias is a condition when people are unconsciously overestimate the likehood of positive events and underestimate the likehood of negative events. This could encourage us try new and difficult things, because we are sure that everything will be fine, but could makes us to forget about the risk.

Why it's occurs ?

Some factor could lead us to optimism bias :
1.The experience of keeping some level of control over the things around us, including what will happen in the future for us. That feeling of expecting and reach it makes us confident that everything is worked as we want or think;
2.Natural tendency to accept and belief based on positives information.
3.Optimism is better for our mental and physical health, because it would reduce the anxiety and reduce stress.

Example of Optimism Bias in Crypto

The perfect example of Optimism Bias is the Luna event, when the value is dropped more than 99% and we heard that some people thinking about suicide because they are literally investing all of what they've got. The optimism bias cause people to ignore the risk and only looking for positive result.
I personally have this experience when bought huge ammount of venari wavesmith on it's positive trend. From 2$ until 5$, I got many of them to rent it again for nice APR, only to see the reality that it's value droped into less than 0.03$ on a few month later.
The Fear of Missing Out (FOMO) is widely known on investing world, and that is another example of Optimism Bias
On crypto world, where the value is depend on the market and could having a significant up and low, it's important to keep in mind the risk of it and investing based on it. Cold money is recommended because we may lose it's value at anytime despite the chance to raise huge ammount of the value as well.

How to Avoid Optimism Bias

1.Educate Ourself. The more we read, the more we know, the more we learn about things we are going to do. This includes the risk the we are going to face.
2.Be critic. Always try to look information and point of view. Makes analysis with the tought of your project is failed. This could lead us to find a reason of why it's fail and prepare for it.
3.Seek for opinion. When we are on optimism bias, we might already know the risk but failed to recognize it due to the over confident. Outsider, could give a honest opinion and help us to remind the risk we are not knowing, or underestimate.

Final Words

Thank you for kindly read my post, i hope we can take a lesson from this post, and avoided from the optimism bias that could lead us to misseable failed/loss.

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7 months ago in LeoFinance by ramadhanight

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renny187 7 months ago

What a nice thoughtful and duly researched article

I have come to know that Optimism Bias is a condition when people are unconsciously overestimate the likehood of positive events and underestimate the likehood of negative events and also that it is better for our mental and physical health, because it would reduce the anxiety and reduce stress. But I also understand how to avoid it when it comes to Crypto market that is by Educating myself and being critic and so on as well.

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ramadhanight 7 months ago

Thanks for stopping by.
That is very well conclussion.
The hardest part is trying to apply it, because it's a natural condition

!PIZZA

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renny187 7 months ago

You're right

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pizzabot 7 months ago

PIZZA!

$PIZZA slices delivered:
@ramadhanight_(1/5) tipped @renny187

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