When Not To Trade

Day Trading Every Single Day No Matter What


As day traders we seem to think that we have to make a trade or more every
single trading day. However, this is far from the truth, especially after one has
gained experience in trading and has rules set in place for trading. After spending
some time trading we gather our data and can identify things like a more accurate
time of day, stock prices, volume, the day that we do better or worse at as
traders.
Armed with this information we set out rules like no trading before 9:45
am, no trading during lunchtime, no trading stocks under $1.00, and so on and so
forth.

 

Sitting On Your Hands


There are trading days where we might sit on our hands for hours before we take
our first trade simply because no stock had a setup that fell within our rules or

parameters. Sitting on our hands is an essential lesson we must learn as traders
and make sure we acquire proper day trading education so that we do not force
trades or step out of our rules which could cause us to lose money. If we know we
do not trade well before 9:45 am then we are putting ourselves at risk of losing
money.

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The Bell Rings

Picture this, if the bell rings and you jump into a stock that is outside of your
criteria, for example, you do not do well before 9:45 am and with stocks under
$1.00 and at 9:32 am you jump into a 75.cent stock you are potentially putting
yourself at a disadvantage according to your stats and you were better off not
taking a trade even if it took 2-hrs for your setup to appear on your screen.

 

New traders who lack day trading education will fall victim to this for many days,
weeks, months or even years and this could very well have been their main issue
and if it had been fixed through proper day trading education they could have had
a very good potential shot at success as a retail day trader.
This is why taking
notes of your trades is important so you can pinpoint when you should not be
trading and what you are good at trading so you can be laser-focused.

Is Learning To Not Trade As Important As Learning To Trade?

Learning when not to trade is as essential as learning to day trade, to begin with,
because knowing when not to trade can be the difference between blowing up a
day trading account and allowing yourself time to learn and grow as a trader. If
you sit at your desk and only wait for the setups you are confident in and have
high probabilities of working out then you are putting yourself in an environment
that is ready for success rather than trading stocks that do not fall within your
setup parameters. This is why learning when not to trade is absolutely essential
for all-day traders and all traders in general.