In this kind of market, your own brain can cost you a fortune.

As traders and investors, we’re not just battling the market… We’re battling our own hard-wired psychological biases.

Now, these “mind mistakes” can cost you money in a bull market.

But in a bear market? They can ruin your financial future.

These are the split-second emotional decisions and stubborn mental habits that quietly wreck portfolios all the time...

Especially when volatility is high and headlines are screaming.

Whether or not we have actually entered a new bear market, the reality is that volatility is high and will remain elevated for some time.

So here are seven “mind mistakes” to watch for — and how to avoid them in a period of high volatility.

#1: Confirmation Bias

As human beings, we are always looking for others to confirm our beliefs. This is also true in the markets and in the media.

When the stock market is up, everyone talks about how we are in a bull market that will never end. When it comes crashing down, it can feel like stocks will never go up again.

Obviously, neither is true. And it’s up to you to find sources that can cut through the noise. (Truth & Trends is one of them!)

#2: Recency Bias

This is when our mind looks at what happened recently and expects it to happen again.

Recency bias is particularly dangerous when we move from one stage of the market cycle to another.

The trading disciplines that made you money in a bull market (“buy the dip”) can crush you in a bear market.

This can also impact you in the very short term.

Every time the stock market sells off big, it feels like the world is ending. When it rallies big, the correction is over.

Keep your head and be patient. Look at the situation at hand and make a cool judgment.

#3: Gambler’s Fallacy

Inexperienced traders will often see a pattern where it doesn’t really exist. The human mind wants to find patterns.

This instinct is even more difficult to control in the stock market, since there are patterns that exist with technical analysis.

Remember to stay disciplined with what has worked for decades and not to buy into the sustainability of new patterns.

The stock market may have sold off every time Trump spoke on TV for the last two weeks, but it might soar every time for the next two weeks.

#4: Loss Aversion

This one is simple: Losing money hurts much more than making money.

Believe it or not, losing money has a physical impact on our bodies. We feel pain at eight times the level as we do happiness.

As an investor, this can be devastating.

Watching every tick on your long-term investments can be overwhelming and lead you to make mistakes that will ruin your portfolio.

Learn to walk away and not be overwhelmed by emotion.

#5: Anchoring

This is when we fixate on a “starting point,” or what we paid for a stock, in the past. It’s the most dangerous when we transition out of a bull market.

Remember, the market doesn’t know (or care!) what we paid for a stock. The world changes, and we have to adapt to it.

Resetting your mindset and avoiding anchoring is probably the single biggest key to adapting to a bear market.

#6: Endowment Bias

It’s normal for us to put more value on something we currently own. This is dangerous with stocks.

We may accurately view the stock market as having much more downside, but we view all of our own holdings as undervalued.

This can kill your portfolio.

Try a mental exercise by asking yourself: if you never owned the stock, would you buy it again today?

#7: The Illusion of Control

For us to operate successfully in a chaotic reality, the human mind tricks us into believing that we have some control.

We may have influence in life, but not control. In the markets, we have neither.

The only actions you can control are your own trades. I like to use the example of surfing…

You surf the wave; you don’t make it or control it. Learn how to surf the waves of the market, and it will help you avoid a wipeout.

The market will do what it does — rise, fall, and surprise anyone who thinks they know exactly where we are headed next.

But how you respond? That’s entirely up to you.

Stay sharp, stay disciplined, and don’t let your own mind become your worst enemy.