Grades 9–12 · Lesson 5 · 60 minutes
Behavioral finance and market psychology
Students identify cognitive biases and create rules to reduce emotional trading.
StockSt uses fictional currency and simulated shares for education only. This is not investment advice.
Warm-up
Ask students to recall a time they made a quick decision they later regretted (a purchase, a game choice, or a social decision). Ask what they were feeling at the time and what might have slowed them down.
Mini-lesson
- Define FOMO, herd mentality, anchoring, overconfidence, loss aversion, recency bias, and confirmation bias, with a one-sentence market example of each.
- Explain that bias is a normal feature of human thinking, and that investors manage it with rules and checklists rather than willpower alone.
StockSt activity
- Run a simulated “hype cycle” in which one share rises rapidly after positive news.
- Students must decide whether to buy, hold, trim, or avoid the share.
- Before acting, students write a pre-mortem: “If this trade fails, what will have happened?”
Discussion
- Why do bubbles form?
- Why can smart people make poor decisions in markets?
- What rules protect against panic selling?
Exit ticket
Students identify one bias they are most susceptible to and one counter-rule.
Assessment
Bias self-assessment and trading-rule document.
Student Learn links
Assign these before or after class so students practice the same ideas.