---
title: 'Human Psychology in Share Market | 100% Proven Mental Tricks to Make Money & Avoid Loses'
source: 'https://youtube.com/watch?v=s8aPvdf7xjk'
video_id: 's8aPvdf7xjk'
date: 2026-07-28
duration_sec: 534
channel: 'Pushkar Raj Thakur: Stock Market Educator 📈'
---

# Human Psychology in Share Market | 100% Proven Mental Tricks to Make Money & Avoid Loses

> Source: [Human Psychology in Share Market | 100% Proven Mental Tricks to Make Money & Avoid Loses](https://youtube.com/watch?v=s8aPvdf7xjk)

## Summary

This video explores three psychological phenomena—mental heuristics, sunk cost fallacy, and loss aversion—and demonstrates how they influence decision-making in the stock market. The presenter uses relatable examples, such as comparing line lengths and eating at a fast-food restaurant, to explain these biases and how they lead to common trading mistakes.

### Key Points

- **Mental Heuristics Introduction** [00:00] — The video opens with a visual illusion where two lines appear different lengths but are actually the same, illustrating how the brain takes mental shortcuts and makes quick judgments without deep processing.
- **Mental Heuristics in Trading** [00:36] — The presenter explains that mental heuristics cause people to make snap judgments, such as picking stocks based on superficial factors without analyzing financials or balance sheets, leading to poor investment choices and losses.
- **Sunk Cost Fallacy Example** [02:27] — Using the example of a ₹500 meal at McDonald's that is not enjoyable, the presenter explains how people feel compelled to consume it because they already paid, illustrating the sunk cost fallacy where past investments influence current decisions.
- **Sunk Cost in Movies and Stocks** [04:04] — The presenter compares sitting through a boring movie because tickets were purchased to holding onto losing stocks because money has already been invested, highlighting how this fallacy leads to irrational behavior.
- **Sunk Cost in Stock Market** [05:07] — The presenter explains that traders often book profits quickly on winning stocks to avoid potential losses but hold onto losing stocks, waiting for them to recover, which is a direct application of the sunk cost fallacy.
- **Loss Aversion Definition** [06:01] — The presenter introduces loss aversion, stating that the pain of a loss is three times stronger than the pleasure of an equivalent gain, which drives irrational behavior in trading.
- **Averaging Down as Loss Aversion** [06:51] — The presenter explains how investors average down on losing stocks to reduce their average cost, hoping to break even, which is a manifestation of loss aversion and can lead to further losses if the stock continues to decline.
- **Applying Psychology to Daily Life** [08:13] — The presenter concludes that these psychological phenomena are not limited to the stock market but appear in daily life, and understanding them can help individuals avoid making similar mistakes.

### Conclusion

The video concludes that understanding these psychological principles—mental heuristics, sunk cost fallacy, and loss aversion—can help individuals make better decisions in both the stock market and daily life. The presenter encourages viewers to comment if they want to learn more about human psychology.

## Transcript

So before I start this video I have a question For all of you, here you see that there are Just answer a small question, which line do you find bigger. The bottom line is bigger and it is bigger, Your brain said, it still looks big.
But I'll just prove this because I drew the line for you guys just so that I can show you what these lines are, it's the same. Let me show you that their length is the same, see this, their length was the same.
But why did you think that the bottom line is bigger, today you are going to learn Human And this human psychology will be useful in your life and also in the share market and
you will know why people make mistakes then this phenomenon called Mental Heuristics. Now, this mental heuristic is not good for you most of the time because it means that
your mind does not want to spend much time processing information. It doesn't look once but it immediately judges, as I said that which line is bigger than your mind did not draw such lines like this that you think that such lines can also be equal
but It just passed judgment once and by seeing from above that bottom line is big and now how these people use adversely in share market for themselves, I will tell you that when
People don't see the financials of the company and they didn't even see the balance sheet is looking nice and they judged once and we pick the wrong stocks and then we face losses
and we don't spare time for technical analysis because for that information has to be processed And because you will not put mind and you will not invest time and you are conditioned
that is not your mistake, your mind is conditioned that it doesn't want to give time, but you know that if we can make mistake then we don't have to make that mistake and from here we come to the next phenomenon and which we call sunk cost fallacy, now what does it mean,
now I give an example to you that first, you think for yourself that you are going somewhere 200 km away from your home and you feel hungry on the way and you are driving. Now you feel hungry and you drive and you stop at a takeaway restaurant and example
you stop at a McDonald's and there you order your favorite burger and you say that make a meal and you put french fries in it and also put coke and you get your meal there
and you take your meal and you put it in the car and you are driving and when you are driving then you pick the coke and you drink it and you feel that there is no fizz in it and it is feeling like that it is water, there is just sugar mixed in the water and that's it,
you are not getting the flavor of the cock and then you put your hand in french fries and you think that they are dried and they are not crispy at all then you think that And you pick up the burger and when you pick the burger then you think that it is feeling
and that much crispness and now what you will do, my question is what will you do. You have given ₹500, you can drink coke, and you can also eat french fries but it is
not crispy and you have taken a burger and that is not much good but still you can eat, Most people will not throw it, and they will not throw that food away and they will say
that we have ₹500 and we will eat it and because people eat then they think that money has gone now and Money is drowned and what to do now, now we will not throw it, we will
utilize it and take one more example that you go in a movie theatre and that is not your favorite movie and you sit inside with your family and you have taken everybody tickets,
now while watching the movie you say what a bad movie, no story, no fun, Absolutely boring, what you will do, will you come in between from there and you will say that we will not come and we will not come because there is a signal in your mind that you have
spent your money and your mind is saying that you have spent money then even we took the air of AC for 3 hours, but we will sit there and if you even abuses after that Money has sunk but still, you guys are engaged in it and This is what happens in the stock market.
We buy shares of the companies from which we are getting loss but if we are getting loss then we bear more because i give you an example of it and you will understand that
your loss is happening and in the shares you get profit you don't stop for that and you don't wait for profit and you get profit and you booked profit and you sold that if it will fall then, we purchased share on ₹100 and it becomes of ₹120 and we got Profit
and we booked profit because if come again on ₹110 then we can get loss, so we booked profit here but when we are getting losses there then we wait for the loss because we invested money, so you wait and you don't take action in between
that, just like you did not come out between the movie then until the share will grow, it is there, but you did not think that at the time of profit and again you are using this human psychology for you in a reversing way, but if you can understand it then you
can also use it in your favour and third phenomenon is that loss aversion, now what is the meaning of loss aversion that we human being, whatever happens, but we can't tolerate loss, and we
have pain in loss and we get pleasure in the profit and we get happy from Profit, but let me tell you that if you get 1X happiness on profit then you have 3X pain on loss, and
you can tell me in the comments that it happens or not, it definitely happens. When there is a loss, it is very bad for the brain that I have a loss and what do people do to protect against this loss, let me tell you what people do, suppose you purchased
a share for ₹100 and now it decreased and it becomes ₹95, and Suppose there is a loss and now Suppose you purchased ₹1000 quantity of it, then here you invested one lakh and
it becomes ₹95000, then there is a loss of ₹5000 and what people will say that they think in the mind that there is a loss of ₹5000 and we have to prevent it then we have more money then we again buy 1000 shares in ₹95000, so our average will increase
and it means that average will not be of ₹100 and it will come of 97.5, and whatever your This means that even if the stock reaches 98, we will still make a profit.
Now it won't, Now let's say it went from here to 90, then if still, we have more money even then we purchased more than our average is out and it comes around 95 or 96 comes, then
even if it comes to 95 of 96 I will not book loss, but I will come out with a profit and in the share, you were getting lost, you kept on investing money in that and you kept investing
money in that and you don't do in which you get the profit that I purchased it on ₹100 and it becomes of ₹120, now I will not buy it, it has increased a lot. But when it is drowning, then money was constantly spent, and this is called loss aversion.
Now only in the share market, but you can see these phenomenons in your daily life and you do it but now if you understand the principles of human psychology, then maybe you will not
book your loss ahead and you want to learn a lot more about the human psychology because I have done my studies on this so I can teach you more about it and if you want to learn then you must comment that you want to learn more about human psychology and if you liked
to more people. then you can subscribe and click on the bell icon. And I will see you in the next video till the time you go self-made.