Reactions are a very important skill to understand and improve - stronger reactions make you a stronger player without introducing any risk. But unfortunately, your "reaction time" is fixed, there is no way to improve it, not even through practise! So how do you improve your reactions?
Your reaction speed, often incorrectly called "reaction time" (a different but adjacent concept), is how able you are to react to what your opponent does. If you fight a Valerie who uses air rainbow, your reaction speed determines your ability to respond effectively.
Reaction speed is a product of your actual reaction time (how long it takes for you to comprehend that you just saw air rainbow start and act in response) and, much more importantly, your readiness to respond. The players with the best reaction speed may have totally average, even poor, reaction times, but as long as they are ready they will outspeed your reaction.
Your reaction time is fixed, you can't train to improve it, but you can both consciously and unconsciously improve your readiness.
Unconsciously, it is improved by your reads and your pattern recognition - you may pick up on how your opponent always jumps in a particular way when trying to perform a particular move, for instance. This is hard to train with intentionality, however, so the conscious part is better to focus on.
Consciously, you improve your readiness by learning what your opponent's options are in any situation. Valerie can't air rainbow if she hasn't jumped yet, and she can't air rainbow if she's at the wrong distance - so if she jumps at the correct distance, you know air rainbow is an option there. Also, she doesn't really have any other options there, so you can be very sure she's going to air rainbow before she's pressed the button at all, leaving you completely free to react! But even if she did have other options, you would still be ready to react to whichever option she picks.
Learn your opponent's options in a given position, learn the little habits players have before they do a move, and your reaction speed will be hugely improved.
Reaction versus prediction:
A very key part of any gameplan is the "usability" of a counter tool, by which I mean a tool that will beat a particular option of your opponent's, for which there are three major categories:
Okay, but all of this is defined by your reaction time, right? If you can react in 200ms, then more tools will be usable on reaction than someone who can react in 300ms, who must use some tools on prediction instead?
Well, yes and no. Your reaction speed will still define this! Until you've removed all the excess factors and are left with raw reaction time, those factors will be more significant than your reaction time could ever be. Additionally, people with worse reaction times tend to compensate by improving their reaction speed. But yes, your reaction time is the upper bound, and at the fastest levels of reaction speed someone with a faster reaction time will have more tools available.
So don't worry about your reaction time! Very few people hit their peak, the vast majority of people are still working on their reaction speed, most likely including you. Good luck!