Better to Predict...or React?

Better to Predict...or React?
It is better to predict than react.
(This reminds me of Machiavelli's chapter, 'Whether it is it better to be feared than loved?')
Any intervention in the market, whether a buy or a sell entry, is a prediction to close it out at a profit.

It is simply that you can take hold of the principle and build an accurate trading model to deliver prediction.
First choose your market, though.

 

Well, lets just say we as speculators are professional predictors and react upon our predictions. Hows that?

The problem with reaction to price moves is that by the time you get filled, the mkt is ready to consolidate and a good retrace will gobble your STOP. Then guess what happens? Yep, it takes off again.

The speed and momentum of the initial breakout is important in deciding to chase "IF" you did not see the move coming. We all can surely be surprised, news breaking can cause a fast assed move out of the blue. In cases like that it might be best to wait for a retrace before jumping on board.

In the early trading days i was more a reactive trader, these days i want to see the upcoming chart in the head as a PREDICTIVE move, then usually place Limit orders and wait.

 

Yeah, almost right!

Predictors are the winners and the 'reactors' pay for those wins.

 

The Anatomy Of A Prediction


"Here catch this! " I say tossing you a ball.

You grab it .

" You know how you caught that ? " I Ask.

"BY PREDICTION"

 

React

 

And if you drop the ball or miss it?
No, that was simple reaction.

Prediction involves a lot more.

 

Predict, but keep in mind: Trade what you see, not what you think (or predict). meaning, trade with the flow in the case when your prediction is wrong...

 

For me, I will watch a stock trade and think to myself (as I am watching the price action) "I really wanna smack that bid with 1000 shares" and usually in a less than a minute I will see a seller start to build up so I smack the bid and cover 30 cents lower. So I predicted selling to the bid was a good idea and reacted when the setup was optimal. So both prediction and reaction played big parts.

 

I agree with you and I am curious ,what do you use to deliver prediction ? Indicators , geometry ?
Thanks

 

Neither.

Accurate prediction modelling as the most successful form of immediate trading is not a favorite among independent traders if indeed used at all. Many or most claim either they don't need to or that reading the market is better.