Tackle Today: WYSIATI 👁
August 14, 2018
≈ No, it is not. ≈
WYSIATI is the acronym for What You See Is All There Is, a cognitive bias described by Daniel Kahneman in his book Thinking, Fast and Slow.
In his own words, what the WYSIATI does is that we tend not to look for what we don’t see. If we see a story or some elements of a story we construct the best story we can out of those elements and we are not fully aware of what we don’t know. We take the available information, usually partial and biased, and we make the best possible story out of it. That’s the way our mind works.
Take a 10-year chart of any stock with monthly candlesticks, for example. Do you think that everything we need to know in order to make an investment decision is right in front of us, inside all those candlesticks?
No, not at all. One candle = One month, and we can’t even imagine what happens behind the price of a single stock in one month. But we make investment decisions nonetheless.
Reduce the chart to weekly candlesticks; then to daily; now to a 1-minute intraday chart. What kind of stories do we create out of so little information?
That is exactly why we don’t trade the markets but only our perception and beliefs about the markets.
If there’s anyone here who knows why these two securities should not be joined together let them speak now or forever hold their peace.
Chart of the Day
The Cognitive Bias Codex
The Cognitive Biases are tremendously useful to address at least four problems we have:
(1) information overload,
(2) lack of meaning
(3) the need to act fast, and
(4) how to know what needs to be remembered for later.
But, from a darker perspective, this image can perfectly be the Atlas of all the mental traps that plague us.
Video of the day
3 Ways to Find Trades
Coach T teaches 3 different ways you can find trades.
Today’s Lineup
Coaches Lounge 11am EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
Halftime Report 12:30pm EST
The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day and fun in a way that only Matt and Tim can deliver.
Coaches Show 8:30pm EST
Join your coaches every Tuesday at 8:30 PM EST for the Coaches Show, where Coaches Matt, Gino, Noah, and Tim cover the latest market movements, forex news and trades, options positions, spread trades, and specific stocks and indices as requested by Pro members like you.
Market Recap – 4:30pm EST
The Market Recap is designed to give you a quick overview of the day that was. While brief, this report is designed to cover all of the major events that drove the markets that day and help you plan for the trading day ahead.
Good stuff.