Have you ever invested a coin without knowing why? Do you believe it will increase in price because it has been heard and followed the crowd? If that’s the case, you’re probably stuck in an effect called “Bandwagon”.

In economics, the term “Bandwagon” refers to the psychological phenomenon of people doing something simply because others do it, and they irrationally believe in the actions of others

When trading, Traders face a lot of different psychological effects, such as FOMO, anchor effect, Dunning-Kruger, etc., but especially the Bandwagon effect — the core cause is creating the wave background. The asset bubble is widespread in all aspects of today’s cryptocurrency sector

A typical lesson, in the Crypto market, in early 2021, the first time Tesla CEO Elon Musk only tweeted a short line “Bitcoin is a good thing”, immediately this coin increased to $ 42,000 in a few days. But after only a few months, Elon Musk officially announced the breakup of this coin, causing BTC to fall to the $ 37,000 mark after only a short time to the top.

The impact of Bandwagon psychology can affect the individual to the extent that he “loses himself” leading to not being able to control his emotions and behavior when trading.

In order for us to quickly this phenomenon, the first thing investors need to do is learn to control and control their emotions. Practice little by little every day, no matter how much or how little. When encountering emotions of fear, greed, panic, etc. in trading, you need to calm down, stop working and take a deep breath to clear your mind and find the best solution.