In short: Herd behaviour is the tendency to do what everyone else does — buying because others buy, selling because others sell — often out of fear of missing out (FOMO) rather than our own judgement.
Simply put: The EU/OECD framework lists herd behaviour among the most commonly described investment traps, together with overconfidence and short-term thinking. It includes "social trading" — copying other people's trades. A crowd is not proof of value; it is often proof of excitement.
Example: Everyone in an online group is buying a new "token". Mila puts in €500 because she "doesn't want to miss out". A week later the price halves and she has €250. Had she written down her goal, time frame and what would make her change her mind before buying, she would have stopped.
Watch out: "everyone is buying, so it's safe" is a myth. Scams and pyramid schemes use exactly this: "others are already earning". A written plan before buying and a rule not to decide while excited both help.
Source: EU/OECD-INFE financial competence framework for adults (2022), competences 208, 230–232 — https://finance.ec.europa.eu/publications/commission-and-oecd-infe-publish-joint-framework-adults-improve-individuals-financial-skills_en