I must confess that I used to suffer from the frustrations of my perfect 20/20 vision of past trades. It seems that so times in my trading career as I continue to perfect my craft that I would exit a trade with a small loss, or perhaps I did not even enter a trade because the price action just doesn’t fit into my trade plan.
But as I am sure many of you do, I continued to watch the charts or “check-in” on my iPhone APP to see what the market was doing…The amazing part of this checking in process is that I always seemed to be right about the direction of the trade.
Let me explain what I mean by that. When I was not in a trade or I closed out of a trade, even if it hit my profit target I always seemed to not be satisfied. This feeling is commonly referred to as FOMO or the “Fear of Missing Out”. I found myself repeating in my head like a broken record “why did I come out of that trade” or “if I had stayed in that trade I would have banked X pounds”. This 20/20 hindsight, amazingly enough, is always perfect, I never got it wrong, ever! The reason for this is that hindsight is emotionless – emotions in trading are a massive reason why people don’t make money.
I always looked at a trade and for some reason only saw the positive outcome…I never seemed to look at a trade and say, that could have easily gone down/up 20,30, 40 or 100 points. My tunnel 20/20 hindsight vision was unidirectional. When this happens, I struggled with feelings of inadequacy and feelings of grief and I begin to doubt the system rules that I learned like disobeying my stop rules or chasing the market.
The psychological solution that I found that worked best for me was to train yourself to think in terms of losses, as opposed to the potential gain you could have made and focus on a past trade that still haunts to this day. Professional traders focus on risk and not reward when trading.
The Whale program is designed to combat the pitfalls of Hindsight and keep you focused on trading the market that is in front of you and not the market that is behind you.