Predictions can make traders stubborn. Scenarios keep traders flexible. Instead of saying the market must go up or down, I prefer writing what I will do if price reaches certain levels.
A simple scenario plan might be: if price breaks resistance and holds the retest, look for longs. If price breaks resistance and fails back inside, avoid longs and watch for a reversal. If price stays in the range, do nothing.
This removes some emotion from the decision. The market does not need to agree with my opinion. It only needs to trigger or reject a condition.
The more uncertain the macro environment, the more useful scenario planning becomes. A trader who can adapt usually survives longer than a trader who only wants to be right.
A simple scenario plan might be: if price breaks resistance and holds the retest, look for longs. If price breaks resistance and fails back inside, avoid longs and watch for a reversal. If price stays in the range, do nothing.
This removes some emotion from the decision. The market does not need to agree with my opinion. It only needs to trigger or reject a condition.
The more uncertain the macro environment, the more useful scenario planning becomes. A trader who can adapt usually survives longer than a trader who only wants to be right.
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