Stay in control of…your trading
Believe it or not: You don’t have to trade!
In the end it is your choice to trade or not to trade. It is not a decision made by the market, it is one that you control. But most traders feel the need to trade every day. And it is not hard to imagine why.
With the markets open every day from 9:30am to 4:00pm oportunity is everywhere. That’s 6.5 hours full of chances to make money using a few of the thousands of stocks. It is really hard to withstand such a temptation. But sometimes you have to in order to avoid losses and overtrading.
You cannot expect to make money everyday and the market isn’t in a good tradable condition everyday. Sometimes a sideways market may occur, that doesn’t give you much opportunity to find good stocks. Many traders tend to overtrade and trade to big a position under these circumstances. These are two failures that will cost you money in most cases.
Trying to press money out of a flat market is a bad strategy, that you won’t benefit off.
So markets like that should give you the opportunity to rethink your strategy or to research things but you should not trade when you can not make any money.
Always watch your Risk!
Another reason not to trade can be a big profit. You know, one of these opportunities that give you a big emotional boost and leaves you overconfident. That’s a mood you should learn to recognize, because it is very dangerous for your account. An overconfident trader tends to take to much risk into his account and you want to avoid that.
It’s the same on the other side. When you suffer a big loss, it can confuse you and lead to irrational decisions in order to get your money back.
In such cases better pause your trading until you are in an objective and rational mood. Being able to think clear again you can restart trading, because then your decisions will be rational again.
But “Not to trade” doesn’t mean that you aren’t involved in the stock market. You can have stocks in your account, but you don’t sell or buy actively. Put in stops for your stocks and let them work, do some research, rethink your trading strategies and always make sure that you are dealing with risk management at all times.
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