Having a react mentality is not antinomic with anticipation. A great footballer said for example that what makes him different from other average footballers is his anticipation ability. Anticipation is prepation BEFORE market's opening whereas REACTION phase is during market's session. PREPARATION is the key to do 80% of things right.
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Anticipation has to do with creativity because you have to imagine scenarios. People who can't anticipate well better be scalpers than swingers. Before having my model I used to be a scalper ( I still prefer scalp but for reasons of risk control rather than anticipation).
Read the interesting article from Southern California Basket Ball Academy
http://www.shootinghoops.net/scbacreed.php
Anticipation has to do with creativity because you have to imagine scenarios. People who can't anticipate well better be scalpers than swingers. Before having my model I used to be a scalper ( I still prefer scalp but for reasons of risk control rather than anticipation).
Quote from NihabaAshi:
Hi Bruce,
As a price action alone trader...one of the key concepts is to understand how NEWS such as Key Economic Report releases and Breaking News impacts prices.
I'll be more than happy to show you via some charts (if you need) of how price action suddenly reversed a trend as soon as the news event was release or hit the markets.
In fact, I remember on many many occassions where...for example...prices are trending nicely up to a certain time...haven't reach any key pivot points nor resistance levels to reverse dramatically and lose all of its gains...
simply via the news event of an announced (not surprise) interest rate cut by the Fed.
Emotions/psychology move in and out of the markets each and every trading day and news events has considerable impact on such emotions/psychology.
Simply, I was under the impression the conversation is about reacting to price signals after a news event suddenly and dramatically change the price direction into a new trend.
Thus, I don't think the conversation is about anticipating a news event if that is what you meant.
Anticipating is a losers game for most wheras reacting has the better odds.
Why is learning how to react or understanding price action...any trader that's in the dark about an important news event may not understand why prices didn't respect a particular chart patter setup...pivot point that held so well the past few days...support/resistance levels that held so well the past few days.
I remember a particular Jan where a guy that was Short heavy on about 20 contracts in the ES with a nice +1.50 profit...he never followed any news...never watch CNBC nor Bloomberg nor CNN nor watch any news channel that's good at picking up breaking news in the world...
(note: He has a 3 point stop/loss protection in place and his profit-target on the trade was +6.5 points for his intraday position...I still have the chat room log
the market suddenly pop...unexplainable at first...about 2 points...in one chat room I was in...everybody was yelling "SURPRISE RATE CUT and DONT USE MARKET ORDERS"...
the guy that didn't follow news...was in another chat room where everybody has a bad habit of lurking...nobody said anything....all of a sudden...him and a few traders (about 2mins after the fact) start posting...
WHY DID THE MARKET SUDDENLY POP?
(I immediately started thinking of a bunch of traders in a dark basement, using AOL, on a 56k modem that actually only got 33k...planning how they were going to spend their profits from the current Short position... not aware that up those stairs and outside somewhere in the light...SURPRISE...SURPRISE)
Had he been paying attention...he may have been able to Cover his position for a lesser loss instead of waiting for it to be stopped out -3 points.
Simply...he would have reacted to what the market was saying...price action.
(note: Something did go wrong with his stops and he actually suffered a bigger loss on some of his contracts)
Something they say in the military...
"Stay Alert...Stay Alive"
Wish all good trading today and make this Friday another nice pay day.
P.S. I highlighted in your quote with red of what I thought you could also be talking about comparing price action to opinions of where the market may go.
Thus, I completely agree...traders should leave their opinions at the door before putting on a position.
NihabaAshi
