Day traders, especially new day traders, must understand that none of us are fortune tellers.
If you think that you are, you shouldn’t be trading.
Successful day traders don’t anticipate, they react.
This might sound like a snoozefest to you, I get it. Patience is required.
But on the other hand, if you’re buying penny stocks in anticipation that they’re gonna move, you’re just going to be a collector of penny stocks.
Good luck with that!
As much as I’d like to think I know what a stock is going to do, I never know. Instead, I use proven, reliable, repeatable patterns to trade stocks. And I react to those reliable setups.
Case in point: On Monday morning, during my Premarket Prep, I mapped out a breakout for Serve Robotics Inc. (NASDAQ: SERV) at $9.30 per share.
And why did I choose $9.30 and not $9 and not $9.50?
Because over recent history, SERV kept testing that level. I saw it as a potential breakout point, not a sure thing, but a possible price where SERV could spike higher.
And by the way, nothing is ever, ever a sure thing!
But that being said, any price pattern that has been consistent and reliable over time does stack the odds in our favor that it will work.
And that was the case with SERV.
SERV Intraday, One-Minute Candles Chart; SteadyTrade
It hit $9.30 per share at the open and spiked to a high for the day of $10.76 in a little over an hour.
That was a quick 15.7% profit, and it happened not because I anticipated it would but because I reacted to a dependable setup I’ve seen work countless times before.
Table of Contents
Successful Day Traders Don’t Anticipate, They React: Here’s Why
One of the biggest misconceptions I see from new traders is the idea that successful day traders can predict the future.
There’s this myth that the best traders are always one step ahead of the market, anticipating every move like they’ve got some secret playbook.
I hate to break it to you, but that couldn’t be further from the truth. In fact, most successful day traders don’t anticipate at all—they react. And that’s a distinction you’ve got to understand if you want to stay in this game for the long haul.
The Problem with Anticipation
When you try to anticipate the market, you’re really just guessing. And guessing isn’t a strategy—it’s gambling. Save that strategy for the casino.
No matter how good you are at reading charts, scanning news, or understanding market sentiment, the market can still surprise you—every single time.
Think about it—how many times have you entered a trade, convinced the stock was going to break out, only to see it tank?
Or even worse, you shorted a stock expecting it to drop, and it kept ripping higher. In that case, your downside is unlimited.
That’s what happens when you anticipate instead of react. You’re trading what you think will happen. And in a world as fast-paced and unpredictable as the stock market, that’s a recipe for disaster.
What Does It Mean to React Instead of Anticipate?
It’s about being patient, waiting for clear signals, and executing your plan based on what the market is doing right now—not what you hope it will do.
That’s why I always advise my subscribers to trade around key levels that consistently over time cause a stock to move. SERV’s move on Monday is a great example of how that works.
Every day, I use Oracle signals, technical resistance, multi-day breakout levels, weak red-to- green-candle patterns, dip and rips, VWAP holds, premarket fades…the list of reliable setups goes on and on.
If you aren’t familiar with the Oracle system, you should be!
Oracle is our proprietary algorithmic system that scans the market every morning to gather critical data. It then generates a list of 15 to 20 stocks based on criteria such as price range, volatility and premarket volume.
Along with that list, you get an entry signal (green for long, red for short), and an entry price so you know exactly when to trade the stock.
Get the tool I can’t trade without!
When you react, you’re staying nimble. You’re letting the stock show its hand before you make a move.
It’s about using a solid, repeatable process to interpret price action, volume, and catalysts and then taking action when you see your setup unfold. No guessing, no hoping, just reacting.
The Role of Discipline
Yes, anticipation takes discipline.
Successful traders know that sitting on your hands is often the best move. Not every stock is a good trade, and not every setup is a winner.
You’ll avoid unnecessary risk by being disciplined and sticking to your process.
You’re only taking trades where the odds are in your favor, and those odds are better when you use consistent setups like the ones I listed above.
Develop a Reactive Mindset
So, how do you shift from anticipating to reacting?
You need to build a process around your trading. This process should include:
A clear trading plan – Know what patterns you’re looking for, what catalysts matter to you, and what risk level you’re comfortable with.
Patience – Yes, that dirty word, patience…Wait for your setup to develop fully. If you don’t see your signal, don’t trade.
Risk management – Always define your risk before entering a trade. Know your stop loss and stick to it.
Every successful trader knows how to manage risk. To learn how, watch my video below.
Mastering Risk Management: The Key to Sustainable Trading Success
Focus on the present – Forget about what you think should happen. Focus on what’s happening right now in front of you. Trade the action, not the prediction.
Learn from each trade – Every trade is a chance to get better. Review your trades at the end of the day. Learning from losses is just as important as learning from wins.
To study and anticipate day trade patterns, you’ll need a robust trading platform that allows you to apply technical indicators, chart your stocks, and more.
StocksToTrade is my top pick. It has all the features that traders like me look for in a platform. It also has a selection of add-on alerts services, so you can stay ahead of the curve.
Grab your 14-day StocksToTrade trial today — it’s only $7!
My Final Thoughts
One of the biggest lessons I’ve learned in my +15 is that successful traders are not in the business of guessing. They’re in the business of reacting.
The market is unpredictable and it’s a rough playing field out there. But if you can wait for your setups and react to what’s happening, you’ll have a huge advantage over traders who are always trying to predict the next move.
Finally, keep learning, study all the dependable patterns, and maintain discipline.
Join one of our free live webinars to keep your trading fresh and learn more about the patterns I look for every day.
They run all day and offer trading tips and tricks, information about how we use our proprietary Oracle system, and other valuable training.
You can also tune in to my free weekly SteadyTrade podcast that I co-host with Matt McCall.
Watch or listen (or both!) to it here.
Have a great day, everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade