When we say “reacting” to light attacks, what do we mean? This sounds weird, but this always confused me. 

Is reacting to a light attack:

-Seeing an indicator, and parrying immediately?
Or
-Seeing and indicator, Reacting and realising that it is a light not a heavy, and then parrying?

Basically what I am asking is reacting to light attack based on differentiation between light and heavy animations and indicators or is it just reacting to the red and mashing parry instantly