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Strategies & Market Trends : Trade What You See, Not What You Think -- Ignore unavailable to you. Want to Upgrade?

To: TraderAlan who wrote (143)	11/4/2000 3:32:11 PM
From: Threei	Respond to of 867

Alan, you hit the spot I am stumbling onto for a while: definition of anticipation vs reaction that would eliminate this confusion. We apparently mean the same but some semantic details are getting in the way. Anticipation that I consider to be mistaken approach goes along with your lines: Forget the news, remember the chart. You're not smart enough to know how news will affect price. The chart already knows the news is coming. It would sound like: as a result of certain external event stock should do this and this. Anticipation that is valid as approach to trading should be drawn from market action and based on setups that proved their reliability % wise. It would sound like: as a result of certain formation on the chart (action on the tape) next stock action should be that and that. First is pure guessing, and if stock does opposite trader holds on his opinion because the original reason is still there. Second is based on observation of actual market behavior, and if stock does opposite trader gets out because his set of scenarios includes setup failure. Stll vague, I know... I'll think of better definitions (unless you already have one :) Vadym

To: TraderAlan who wrote (143)	11/4/2000 7:23:26 PM
From: Tai Jin	Respond to of 867

I guess I should clarify what I said. There are different types of anticipation, and it is a useful trading tool. Like anticipating in a setup situation since they are known to have certain outcomes with high probability. So one can enter before an expected outcome in anticipation and react to a failure of the outcome. After the confirmation of a setup one can still be guided by expectations, but reaction is still key. Sometimes I enter before an expected breakout, for example, and other times I wait for confirmation. I guess it depends on how much confidence I have in the situation. So anticipation based on the chart is fine, but anticipation based on other factors is more likely to lead to the ego thing since interpretation of those other factors is likely to be very subjective (not that reading a chart is not subjective, but it is certainly much less so). ...tai