React, Don’t Predict

I think one of the best trading advice I’ve ever seen on Twitter is these three words:

React, don’t predict.

Take what the market gives you. React to what the market shows you.

Don’t ever go in with preconceived notions of how this trade will turn out.

Don’t ever say things like:

“This is going to give me at least 2x. I can just feel it.”

“This is the perfect setup I’ve been waiting for. I’m going to make a killing on this trade.”

“I’m holding this trade until I get my 3x. I feel good about this one.”

I think trying to predict anything in trading is a recipe for disaster, for a few reasons:

One, it makes you take emotional decisions despite the conditions hinting otherwise.

Two, it may end up with you going into “revenge trading” mode if your so-called “prediction” doesn’t turn out correct.

So remember, we’re not psychics. We can’t predict the future.

All we can do is come prepared with a solid plan, execute the solid plan to perfection, and learn to take what the market gives to us.

That’s basically what trading is to me – taking whatever you can from the market based on the conditions that are presented to us.