Knowing When To Trade and When To Do Nothing

This morning was a great example of how knowing when to not trade is so important.

I would take it a step further. Not trading IS trading. Making the decision to stay on the sidelines is just as important as making the decision to go long something. It is still a decision. Decisions ARE trading.

Often a trader will tell me, I didn’t trade today. I just stayed on the sidelines because nothing looked like a good setup. But that is trading.

Markets did a gap up open and then started heading down. I looked at various stock screens and nothing really looked good. The major indices kept going down. I made the decision to stay on the sidelines until the market consolidates at a particular level.

That was really the right call as markets dropped even further.

Knowing the strength of Bears and the probability of a pullback helped me make the decision to stay in cash.

When I sit on the sidelines and in cash, I want to remain calm and collected. Andrew York helps with that:

Here are more things you can do when you’re on the sidelines. What do you like to do when you’re on the sidelines and waiting for a better setup? Leave your comments below.

Author: Lance Jepsen

For ethical purposes, I try not to hold any position in any stock I profile on unless specifically stated in the article. Owner of Seasoned entrepreneur, investor, and writer. I love God, family, country, stock trading, economics, and helping people learn how to trade.

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Sofi AI Market Sentiment Gauge

Market is neither overbought or oversold.