A better perspective is that Allah knows of what we, did, do and are going to do. Now this is described as Qadr (destiny).
I will quote some Ahadith which will clarify most of your misconceptions:
Abdullah (b. Mas'ud) reported that Allah's Messenger (may peace be upon him) who is the most truthful (of the human beings) and his being truthful (is a fact) said: Verily your creation is on this wise. The constituents of one of you are collected for forty days in his mother's womb in the form of blood, after which it becomes a clot of blood in another period of forty days. Then it becomes a lump of flesh and forty days later Allah sends His angel to it with instructions concerning four things, so the angel writes down his livelihood, his death, his deeds, his fortune and misfortune. By Him, besides Whom there is no god, that one amongst you acts like the people deserving Paradise until between him and Paradise there remains but the distance of a cubit, when suddenly the writing of destiny overcomes him and he begins to act like the denizens of Hell and thus enters Hell, and another one acts in the way of the denizens of Hell, until there remains between him and Hell a distance of a cubit that the writing of destiny overcomes him and then he begins to act like the people of Paradise and enters Paradise.
All reported: We were in a funeral in the graveyard of Gharqad that Allah's Messenger (may peace be upon him) came to us and we sat around him. He had a stick with him. He lowered his head and began to scratch the earth with his stick, and then raid: There is not one amongst you whom a scat in Paradise or Hell has not been allotted and about whom it has not been written down whether he would be an evil person or a blessed person. A person said: Allah's Messenger, should we not then depend npon our destiny and abandon our deeds? Thereupon he said: Acts of everyone will be facilitated in, that which has been created for him so that whoever belongs to the com. pany of the blessed will have good works made easier for himand whoever belongs to the unfortunate ones will have evil acts made easier for him. He then recited this verse (from the Qur'an):" Then, who gives to the needy and guardsagainst evil and accepts the excellent (the truth of Islam and the path of righteousness it prescribes), We shall make easy for him the easy end and who is miserly and considers himself above need, We shall make easy for him the dificult end". (XCii. 5-10).
Abu Huraira reported Allah's Messenger (may peace be upon him) as saying: There was an argument between Adam and Moses (peace be upon both of them) in the presence of their Lord. Adam came the better of Moses. Moses said: Are you that Adam whom Allah created with His Hand and breathed into himHis sprit, and commanded angels to fall in prostration before him and He made you live in Paradise with comfort and ease. Then you caused the people to get down to the earth because of your lapse. Adam said: Are you that Moses whom Allah selected for His Messengership and for His conversation with him and conferred upon you the tablets, in which everything was clearly explained and granted you the audience in order to have confidential talk with you. What is your opinion, how long Torah would haye been written before I was created? Moses said: Forty years before. Adam said: Did you not see these words: Adam committed an error and he was enticed to (do so). He (Moses) said: Yes. Whereupon, he (Adam) said: Do you then blame me for an act which Allah had ordained for me forty years before He created me? Allah's Messenger (may peace be upon him) said: This is how Adam came the better of Moses.
Abu Huraira reported from Allah's Messenger (may peace be upom him) many ahadith and one amongst them is that he is reported to have said: An infant is born according to his (true) nature. It is his parents Who make him a Jew, a Christian, just as a she-camel gives birth to its young ones. Do you find any deficiency in their limbs? You cut their ears (i. e. after birth). They (the Companions of the Holy Prophet) said: What is your opinion about him who dies in infancy? Thereupon Allah's Apostle (may peace be upon him) said: It is Allah alone Who knows best what they would be doing.
Abu Huraira reported Allah's Messenger (may peace be upon him) as saying: A strong believer is better and is more lovable to Allah than a weak believer, and there is good in everyone, (but) cherish that which gives you benefit (in the Hereafter) and seek help from Allah and do not lose heart, and if anything (in the form of trouble) comes to you, don't say: If I had not done that, it would not have happened so and so, but say: Allah did that what He had ordained to do and your" if" opens the (gate) for the Satan.