Don't let Captain Hindsight mess with your tradingCaptain Hindsight is bound to get in your head.
Whether you’re just starting out or you’ve been trading for the last 10 years or so.
He is going to question you with two simple words.
And these two words, can really cause a negative impact on your trading portfolio.
In this short article, I’m going to warn you about how he’s going to uppercut your mind and most likely cause havoc with your trading.
This way, you’ll know what to watch out for.
A dangerous two word question to interfere with your trading
What if?”
Here are some…
“What if the market is in a bubble and I buy too high?”
“What if I’m wrong about this trade?”
“What if my trading strategy worked then, but won’t work now?”
“What if the market is in a period where I’m just going to take losses?”
Whenever the captain whispers these questions, you’re going to feel vulnerable and start second guessing your trading system, strategy and skills.
Succumb to the Captain and he’ll be back stronger and more powerful than the last time.
Here are THREE ways to beat Captain Hindsight before he returns
ACTION #1:
Extend your back-testing
So you have a trading system that you believe works… Prove it.
Go back and re-test different markets and jot down every time the system lined up.
Record every trade, including the costs and the statistics and prepare yourself for what is to come.
The more you back-test your system, the more markets and environments it would have weathered and endured. If it came out with all time highs on your portfolio, it’s a winner.
Captain Hindsight – won’t have anything on you – with a decent track record…
ACTION #2:
Drop your risk
The most common way for a trader to feel emotional, is when they have a lot to lose.
The larger your trading position, the more desire to win and the more fear you’ll have to lose.
This is why greed, fear and panic are the most ongoing reasons for traders to annihilate their portfolios.
Trading is a get rich slowly but surely game. And when you accept the gains and losses, you won’t care what the Captain has to say.
ACTION #3:
Step away from the screen
Not only will Captain Hindsight creep in before you take a trade. He’s bound to enter your mind while you’re in the trade.
“What if you’re wrong about this one?”
“What if you get out of your trade now while you’re in a profit?”
“What if you take a small loss, because it looks like this trade is a loser?”
The best action to take, when you’ve entered your trade with your trading levels (Entry, Stop loss and Take profit), is step away from your trading account.
Distract yourself by getting a drink, water your garden, take a drive or do other work.
The less you’re glued to the screen watching your trades, the less you’re going to feel worried about the small moves that happen in the day.
Always remind yourself…
“My trading strategy will REWARD me for following it.
My trading strategy will PUNISH me for NOT following it.”
These three actions will eventually help you beat Captain Hindsight for good, as it did for me over 20 years ago.
Hindsight
STEP 1 to MASTER TRADING: Hindsight trading. Train your eyes.A common mistake that traders make after learning any kind of trading setup is jumping into backtesting using a replay tool, or even live trading.
However, if you think about it, trading is very much about pattern recognition. And when you force yourself into live trading without a proper understanding of what your patterns look like, most likely you’ll need much more time to succeed.
A different approach and much more effective would be using hindsight, that’s when you see what actually happened.
During this process, try to find at least 50 high-quality setups, that represent your trading system. So you actually see everything that happened and find situations, where your edge played out, document it in your journal. That’s great training for your eyes and brain.
You don’t need to guess, you will not feel anything, because you already see what happened, you’ll notice that sometimes your edge, your system doesn’t give you entries and price goes without you, sometimes, you’ll see a loser or a breakeven after your entry, start to get used to this, as it’s all part of your system.
After that, you'll have a much better understanding and vision for your setup - and that could be the time to try some backtesting and forwardtesting.
I’ll talk more about a different kind of backtesting in future posts. Meanwhile, take care, send your questions, and comments, will be glad to chat with you.
Dima
$BCRX retrospective lookRetrospective look at $BCRX:
1. Gap down to lower low aligning with oversold signal on RSI (Blue Circle).
2. Continued downtrend forming Descending Triangle (Pink Dashed) following hypotenuse resistance line and flat support line.
3. Double bottom then forms (Green Box & Dotted Line and Orange Arrow) within the converging trendlines.
4. Simultaneous bullish signal on the RSI indicator (Blue Dotted Line).
5. Breakout over resistance trendline with large volume (Blue Volume Circle)
6. RR 1.2:1 take profit could have captured initial move (Long position).
Easier to spot now it's happened!
Hope this will add to my (and potentially others) knowledge/experience.
Any comments appreciated
*Not financial advice*
Hindsight Pig-Peg - A Single 15-min Candle = 1000-Point Rally?Hindsight Pig-Peg's are not as impressive as foresight Pig-Pegs. Even incorrect foresight Pig-Pegs (see all prior Pig-Pegs) are more impressive than anything made in hindsight.
Why do this then? Because I think it may provide crucial information for future market rallies.
Broadly speaking, this may also offer some insight into the true nature of reversals, and possibly, some things to look for.
If this is correct, then that means that the impetus for 1000 points worth of bullish price action can be pinned to a teeny-tiny, singular 15-minute candle.
SPCFD:SPX
How NGAS reacts with harmonic patterns -- hindsight challenge(1)One thing that the analysts in this business will be challenged forever is about hindsight.
Even the simplest single EMA system can look outstanding when it comes to the happened candles.
While, for a mature system trader, what we really focus on is two questions:
1. "Do the patterns match the definition?"
2. "What exactly is the trade? (at least with an entry and a stop loss) "
3. "Is the trade triggered"
One of these 4 trades is a simple hindsight that didn't really match the definition of the pattern,
Let's try to point out which one it is if you know exactly how these trades work yo~!!
BTC hindsight.
link to external chart with what im talking about since im a trading view noob
imgur.com
New trader, mostly just publishing an idea to get something out there.
Looks like in hindsight when the entire asset class is making large % moves upward for days at a time it would make sense to view the upward moves and the challenging of resistances in this under rated light, without any RSI.
Basically if I were to have looked at this simple indicator during the bull run I would have seen that the Price/Volume indicator channeled downward after the first rejection of the 99xx area. When we began to climb again toward 99xx, the Price/volume indicator stayed flat. This is a sign of losing steam, and although simple can predict the timing of retracements such as these or yield good exits.
Good luck and happy trading!!