Home › Knowledge › Atlas of Trading Mistakes › Recency bias Recency bias
Atlas of Cognitive Biases #24 · Information and beliefs. The last day isn't the whole market
What it looks like in trading
expecting a fourth up day after three
judging a method by the last week
changing the plan after one painful session
An example from a session
On MYM the daily move repeated the previous day's direction only 46% of the time (579 days, Biases by the numbers #5). Even so, after a few days in one direction many traders assume it will stay that way.
Hetman Capital Club
What you get in Hetman Capital Club
the full Atlas: 65 biases, each with a shield and a journal exercise tests of the biases on real Dow Jones data (the “Biases by the numbers” series) the trading journal and the trader's mental workshop the US session live, where you can see these biases in practice See what's inside the Club
On real Dow Jones data
Across 577 pairs of days on the Dow Jones since June 2024, the day's direction matched the previous day's in only 267 cases – 46%.
The full analysis with a chart and conclusions: the “Biases by the numbers” series in Hetman Capital Club (in Polish).
What the research says
In the psychology of memory, the recency effect was described by Bennet Murdock (1962), among others. In finance, Sirri and Tufano (1998) showed that investors pile into the funds with the best recent returns, even though good past returns are a poor predictor of future ones.
Related biases
🔒 In the full version in the Club
The shield – how to defend yourself : concrete rules to write into your trading plan. An exercise for the week : how to catch this bias in your journal. Plus tests on real Dow Jones data and bias-recognition training. (The Club is in Polish.)
Unlock the full Atlas in the Club
Frequently asked questions
What is recency bias? Giving too much weight to recent events compared with the longer history.
How does recency bias show up in trading? Typical signs: expecting a fourth up day after three; judging a method by the last week; changing the plan after one painful session.
Educational content, not psychological advice or an investment recommendation.
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A real market. I trade futures contracts on the regulated CME exchange in Chicago, with one central order book where all buyers and sellers meet.Professional tools. Order flow, footprint charts, the order book (DOM), volume profile and delta on a professional platform – the tools professional futures traders use. See them in the Hetman Terminal → Paid data, practice on the Hetman Index. I pay for exchange data and use it for my own trading. On this site and on the stream we practise order flow on the Hetman Index – a training instrument with simulated data.Hetman Capital Club
Now you know this bias. See how to catch it live. In Hetman Capital Club each of the 65 biases has a shield for your trading plan and a journal exercise, and in the live session I show when they really appear: after a loss, after a winning streak and before macro data. The Club is in Polish.
Join the Club 65 biases checklist (in the Club)
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