Gambler’s Fallacy Example | How to Avoid a Common Cognitive Bias

Gambler's fallacy is similar to hot hand fallacy. People let short-term trends impact their decisions. Although, the recent trends don't always match up with long-term averages and underlying probabilities. This is a cognitive bias and you might also hear recency bias used to explain it. As always, please let me know if you have any questions down below. To invest well, it's important to gain a better understanding of logic and psychology.