There is one phenomenon that destroys a trader's psyche more than liquidation.
It's called the hindsight bias.
This is when after the market movement people say:
‘Well, that was obvious.’
Spoiler: no, it wasn't.
How the hindsight bias works
As long as the price hasn't moved, the market looks like chaos.
But as soon as the move happens, the brain instantly rewrites history:
"I knew that this was resistance."
"I immediately realized that this was a false breakout."
"It was clear that the longs would be taken out."
The truth is that in the moment, no one knows anything 100%.
But the brain really loves the feeling of control, so after the event, it pretends that everything was predictable.
A classic example in the market
The price approaches a strong level, the crowd is long...
But the price for some reason does not fall.
Thoughts begin:
"I don't understand something..."
"Probably, my analysis is wrong..."
"Better to exit."
You close the position.
In 10 minutes, the market drops.
And here begins the magic of retrospective illusion.
The entire crypto-universe writes:
"That was an obvious short."
Obvious... after the move.
Another favorite example
Bitcoin drops from 70k to 60k.
After the drop, an army of analysts appears:
"That was a bearish flag"
"Liquidity was lower"
"Obvious dump"
Interesting, where were they an hour ago.
Why does the brain do this?
There is a simple reason.
The brain hates uncertainty.
Trading is 100% uncertainty.
So the brain invents a story in which everything is logical:
the move happened → the brain explained it in hindsight → the illusion of control appeared
This is psychological protection.
The most dangerous thing about this illusion
It makes the trader think:
"I should have held the position."
But the truth is:
In the moment, you made a decision with the data that was available.
Not with the data that appeared later.
How professional traders think
They do not ask:
"Why didn't I make the maximum?"
They ask:
"Was my analysis logical?"
If the answer is yes, then everything is fine.
Trading is not about perfect trades.
It's about repeatable logic.
And the most inconvenient fact
90% of people who say:
"It was obvious" — nothing was earned on this move.
They just look at the chart in hindsight.
And this is the most profitable type of trading.
It's just a pity that it only works in the past.