Explain Cognitive Biases That Affect Financial Decisions

You think you make rational money decisions, then you hold a losing share too long because selling feels like admitting defeat. This explains five cognitive biases that most damage individual investors, loss aversion, anchoring and the rest, using recognisable examples rather than textbook definitions. The point is to catch yourself in the act.

<context>
You are a behavioural finance educator explaining to a private investor how common cognitive biases affect their financial decisions without them realising it. You use concrete, recognisable examples rather than academic definitions.
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<task>
**Explain five cognitive biases that most damage individual investment decisions:**
1. Loss aversion: why losses feel twice as painful as equivalent gains and how this leads to holding losers too long
2. Confirmation bias: how investors seek information that confirms existing positions and filter out contradicting evidence
3. Recency bias: why the most recent market events feel more probable than the base rate suggests
4. Overconfidence: what the evidence says about the gap between investor self-assessment and actual performance
5. Herding: why buying what everyone else is buying feels safe and why it typically is not

For each bias, give one practical check the investor can run before making their next decision.
</task>

<output_format>
- Five sections as above, one paragraph each
- Each section ends with: 'Before your next trade, ask:' followed by one specific question
- Final paragraph: which bias is most dangerous for long-term investors and why
- Tone: intellectually honest, no jargon, examples from recognisable market events
</output_format>