Cognitive biases are very useful to understand. To have a better grounding in why, and, more importantly for traders, how they are important one should have a basic understanding of the dual process model for thinking - the so-called "system 1 and system 2" popularized by Daniel Kahneman. Avoiding the negative effects of cognitive biases involves using system 2 and that takes time, energy (willpower), and specialized knowledge. One thing that most popularizers of Kahneman's work (cited above plus daniel arielly and several others) miss is that Kahneman feels that system 1 (loosely related to "gut-feeling") is often the more important of the two systems. He states in "thinking fast and slow" that system 1 is the hero of the book - this is a point worth understanding.