Hindsight Bias

Hindsight Bias

In finance, hindsight bias is a behavioural phenomenon where a trader, say, may claim or genuinely believe, after the fact, that they earlier knew that something was about to happen in the market, and so may also (mistakenly) claim to have extraordinary powers of perception or prediction. Once a market move has occurred, hindsight bias can prevent traders from correctly recalling what their expectations were before the move.

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