Is there such thing as prediction and anticipation in trading?

Is there such thing as prediction and anticipation in trading?

There are different kinds of market analysis that traders use to improve their trading and trading decisions. For example, we have sentiment and fundamental analysis. There is also technical analysis where traders maximize the use of charts. Charts can help them anticipate what can probably happen next, even before the situation occurs. How? Charts show what went right or wrong in other people’s trades. Hence, traders can copy a good strategy or avoid making the same mistakes as other people.

We can never predict the future.

The word “prediction” weighs so much, especially in trading. Prediction is like a prophecy or a forecast of the future. Such a thing does not happen in trading. Not even technical analysts can accurately predict what happens next in the markets. If they ever did, it must have been pure coincidence.

Although we say that there is really no prediction in the trading world, at least there is “anticipation.” Traders anticipate when they make strategies to become more profitable. There are instances where traders can anticipate market movements and trends by using technical analysis.

But we can anticipate

If you consider yourself a technical trader, then you must have a good idea about MACD, RSI, Stochastic oscillator, CCI, and the like. These are the tools that you consider before hitting the buy and sell button. Moreover, these come along with recognizable chart patterns that already made history and results. Hence, they can help when making market entry and exit strategies.

Now, if you are a technical trader with enough trading experience, you must already know how it goes by just looking at the first few bars. When we say bars, we may also be referring to charts that you prefer, like candlesticks or line charts. If the first few bars are moving in your favor, then you can move stops and lock in your profits. On the other hand, if the trade is not moving against your favor even after the first few bars, then you must have made mistakes in your technical analysis.

Keeping most of our emotions out of our trades

We create trading plans for a reason. Discipline and keeping our emotions together are two crucial things in being profitable. Trading plans were made while looking at all the aspects where things can go right and wrong. Right before hitting that buy and sell button, you make sure that you covered almost everything. Unless you did not, you should try not to deviate from the original plan because of your emotions. Own your trades and always prioritize your trading plans before anything else, especially your feelings.

Technical analysis and anticipation

Using technical analysis help traders in making great anticipation with basis and data. And when we say that it helps, we are saying that it guarantees success. Here is what you can do to improve your chances of becoming successful and more profitable:

  1. Stick to your trading plan and control your emotions.
  2. Be patient.
  3. Learn from other people’s experiences and yours to become a better trader.