Thread by @Montana_Trades

The following thread will change the way you trade forever, if you listen:⬇️

I want to talk to everyone about something that is absolutely crucial when it comes to being a succesful trader, hindsight. "Hindsight Trading" as I like to call it, is the speed bump you must get over before you can find any long-term strategy or success in the market.

So what exactly is "Hindsight Trading" and how does it affect newer traders in the market? Hindsight trading is when we convince ourselves we could have predicted an outcome after the fact.

We look at a chart from earlier in the day and the way it played out and we think to ourselves "oh yeah, I knew that was going to play out like that". Or, "I should have jumped in earlier because I knew that would be the outcome".

No, you did not know it was going to play out any certain way because the market is a game of probabilities, nothing is for certain. Hindsight is always 20/20, we cannot be thinking in hindsight, we must be thinking in the present.

So what exactly does this look like on a chart and how can we prevent this? Let me show you below. This $DKNG chart, shows a break on a down trend, and confirmation of the 9ema on the 5m timeframe.

If you decided to grab calls or commons on the break of the downtrend, it looked like it was starting to reverse. But as you can see from the chart, it gets rejected near VWAP, and makes a new low for the day as it was again trapped under the 9ema.

Now lets switch to the 15m timeframe. You can see, we experience rejection at the 9ema on the 15m timeframe. If you were only utilizing the 5m, you were not aware that $DKNG was still trapped under the 9 on the 15m. Now what does this have anything to do with hindsight?

Well some people may have looked at this chart after the fact and thought, I knew $DKNG would have been trapped under the 9 on the 15m all day, I should have put half my account into puts. Again, no you did not.

It is easy to make that prediction after the matter, but a whole different story when trying to analyze something in real time. If you would have only been looking at the 5m, you would have thought the reversal was in.

This circles back to my other thread about utilizing multiple timeframes together. If you are switching between the 5 and 15m and see $DKNG break that downtrend and reclaim the 9ema on the 5m, you are aware that on the 15m, it is still trapped below.

So NOW if you play the downtrend break, you know when / if it approaches the 9ema on the 15m, you may experience a rejection. Whether its commons or calls, you have a plan mapped out to scale and potentially get out of it rejects.

This is the difference between trading in hindsight and having a plan and thesis in real time. We need to be able to think on our feet and execute, not review and say what could have been.

To recap:
-Never trade in hindsight
-Utlizie multiple timeframes
-Think / adjust in real time

As always, I hope this thread will be of use to someone. I promise if you can remove hindsight from your trading, you will be very succesful.