When I was in high school, I once walked into class convinced everyone was staring at my shirt. It had a small stain, barely visible, but I was sure it was a glowing neon sign of embarrassment. Later I learned this is called the spotlight effect: the human tendency to think others are paying way more attention to us than they actually are.
Investors fall for the same trap. We assume the whole world is watching the same ticker we are, the same headline, the same “obvious” setup. But the truth? Most of the market doesn’t care about your micro-drama. The spotlight is in your head.
This is why volume and attention cycles matter so much. A stock can quietly double when nobody’s looking, and then collapse once it’s on CNBC every five minutes. Attention itself is a resource — scarce, fickle, and prone to chasing shiny objects.
I’ve said before that markets are stories orbiting around narrative gravity. Here’s the twist: the spotlight effect distorts which stories feel important to you versus what’s actually driving flows. You might think your favorite altcoin is the center of the universe because your group chat won’t shut up about it. But zoom out, and it’s just noise in a massive global arena.
The discipline here is humility. Accept that you’re not under the lights, not the main character. The market isn’t watching you. In fact, it barely notices you exist. And paradoxically, that’s freeing: you can move quietly, build your positions in peace, and exit before the cameras turn your trade into a spectacle.
👉 Next time you feel the spotlight burning, ask: Am I trading because it’s a real opportunity, or because I think everyone else is watching?
🔗 For a primer on the psychology, see Gilovich et al.’s classic study on the spotlight effect.
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