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Apophenia is the general term to describe the pattern-making habits of our brains. This applies to visual illusions, such as pareidolia, seeing faces in inanimate objects, covered in a previous fact of the day, as well as psychological effects like the Gambler’s Fallacy (The effect of assuming that you are owed a win when you're in a losing streak). Apophenia was coined by Klaus Conrad, a German psychiatrist during his studies into schizophrenia in 1958.

The impact of apophenia on financial trades has been studied. The Gambler’s Fallacy kicks in when people will anticipate the movement of a stock based on its previous performance, so a stock will be seen to be “due” a drop or rise. Due to the nature of trading this can become a self-fulfilling prophecy. It's an interesting area of study and shows how fallible humans can get in the way of systems.

Apophenia is an example of how our brains can deceive us. Understanding the fallibility of our thinking allows us to recognise our limitations. Recognition of these limitations makes us more rational because we are able to understand when our brains might be fooling us. This kind of pattern making may explain why people find plausibility in practices like astrology. Our brains constantly try to make connections and this can make it seem like insights are drawn that are very personal simply because they fit nicely into their life history when in reality they fit into many many people's history.

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