Majority of Traders who trade Stock markets know when/How to enter the trade but 95% of traders do not know when not to enter the trade or when not to trade. Trader should trade when opportunity arises based on his trading system and trading strategy. Knowing when not to trade is also a vital part of trading plan .
Wait for opportunity to come think of Virat Kohli he does not hit 4 on every ball but when he sees an opportunity he goes ahead.
Checklist of When Not to trade
- When you are confused, not getting clarity, Things not moving as per your plan, Just stay out and Protect you emotional and trading capital.
- You made a trading plan, but stock either open with Huge Gap and no opportunity in sight, close your terminal and stay out of market, Never try to climb a running bus.
- You are a trend trader and you missed your entry. You need to wait patiently now for next big opportunity.
- The market is extremely volatile due to News Event, stay out
- As Earning Season is in full swing and stock you track will reports earnings the next day, Do not trade till earning announcement is over, High chance of getting whipsawed if you try to trade during earning announcement, Take trade when you have clarity.
- You are a momentum trader but their is not momentum, then wait.
- You play the Short side trader and the market is in a Bull market , wait for trend reversal or change your attitude towards trading. Be an unbiased trader, You will get money if you trade right.
- If you are not at your best mentally and emotionally then don’t trade until you are
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what you said is exactly right…some of them I experienced