Definition. The tendency to give too much weight to the most recent events compared with the longer history.
How it works
The latest sessions are the most vivid in memory, so it's easy to assume the market will “always” behave that way. It's a variant of the availability heuristic described by Tversky and Kahneman.
Example
After a few quiet days a trader underestimates the risk of a sharp move on the day of an important data release.
What to watch out for
What helps: regularly reviewing a longer history in your journal and statistics from many sessions.
You'll find the full explanation with graphics, examples and exercises in the 🧘 Trader's body and mind space, and its use in the live market in the 🔴 Live Room. Both are available to Club members (in Polish).
