Hindsight bias
Also called: knew-it-all-along effect
The tendency to believe, after an outcome is known, that it was predictable all along.
After a price move, the reasons seem obvious, which makes people overconfident in their ability to read charts or forecast markets. Writing analysis down before the outcome is the main defence.
Learn more in these lessons
- Building a repeatable chart-analysis processHow do you analyse charts consistently instead of by instinct?
- Good decisions and good outcomesDoes a profitable investment prove it was a good decision?
- Expectations and surprisesWhy can a company report record profits and see its share price fall?
- Comparing competing explanationsHow do you avoid believing the first story that explains a company's numbers?
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