20 / 20 Hindsight Trading – a not so wonderful thing

(Caption reads: Hindsight.  Those really were the droids you were looking for.)

How many times have you looked at a chart or a trade and gone through the Woulda / Coulda / Shoulda exercise?  Come on, be honest. 

 “Ohh if only I’d bought there….”

“Ohh if only I’d have gotten out there I would have avoided that loss….”

“Ohh if only I’d have held on there look at all the profit I would have made…..”

And a thousand other similar statements usually associated with either a banging of the table or a wistful look into space thinking of all those imaginary profits.

If you have been honest you’ll have admitted to yourself that you’ve looked at the charts plenty of times and played through a hundred and one possible scenarios to your possible trades.

We’re all blessed with 20/20 hindsight, the ability to see picture perfect trades when looking back at the charts. It always looks sooo easy with hindsight.  How many seminars, videos, books (even blogs like this one) have you been through where the so called ‘guru’ picks out all the great trades with ease and precision using hindsight?

However it’s never as easy in real life.  Remember as Traders we are making decisions on the right hand edge of the screen.  This is were ‘the meat hits the metal’ as my old regiment gunnery instructors would say. For intra-day trading we’re making decisions sometimes at great pace in a world of real uncertainty.  We have to become comfortable with our choices and decisions…..regardless of the outcomes.

So what can help you?

Firstly I find embedding the Five Fundamental Truths about the market as depicted by Mark Douglas in Trading in the Zone has helped me enormously.  The first of those truths / beliefs is that ‘Anything can happen’.  By completely and utterly allowing myself to understand and live by that motto I remove a lot of stress, pressure and guilt from my trading decisions.

Secondly I am helped by the use of one of the pre-suppositions of NLP namely that people are always making the best choices at the time based upon what they know.  There are always things happening that I am not aware of, I just have to let go and make the best decision I can based upon what I can see on the chart.  Part of this is about learning to trust myself in an environment where there are no boundaries. 

I’m also gentle on myself when I have had a losing trade and I no longer take it personally.  It’s just a losing trade, it says nothing about me as a person.  It’s just one trade in what will be thousands of trades throughout a lifetime.

By all means look at past charts and use them to help identify great set-ups and opportunities.  Just be aware of when you’re looking at the charts playing the Woulda / Coulda / Shoulda game.  It serves you very little purpose when you come to taking trades.

Trade Well!

FXTrader Paul