When not to trade?

[BONECRUSHER]

Quintessential discretionary trading

RN

I can't remember the last time I did this...maybe 2008 when the VIX was 80!

 

[Cswim63]

I must ask the question...how many of you disregard your "book of setups" and still enter the price action momentum sometimes because it's too irresistible?

That would be a good example of when not to trade. I have a good friend who does that, but less than before.

 

[WildBill]

If you have defined setups that make you uncomfortable, there are a couple of solutions

A...Remove that setup from your trade plan
B...Take the trade anyway

None of us can tell the future, you either have a viable plan with defined setups or you don't.

Or...trade it anyway with less size.

 

[speedo]

I must ask the question...how many of you disregard your "book of setups" and still enter the price action momentum sometimes because it's too irresistible? I haven't done this in many years. I consider myself a grinder.

Very rarely anymore. Made trading more boring but also more profitable.

 

[Xela]

I must ask the question...how many of you disregard your "book of setups" and still enter the price action momentum sometimes because it's too irresistible? I haven't done this in many years. I consider myself a grinder.

I think you'd probably consider me a "grinder", too, then. I err the other way: perhaps too determined not to enter without the set-up being in my "book", and sometimes miss good opportunities as a result.

 

[BONECRUSHER]

Difficult to be sure exactly what you're asking, but let me try to explain with this example....

Let's say the ES makes a "matched low @ ____", but you decide to not take the trade (assuming your strategies include playing "matched lows") because "the RSI isn't oversold enough". The RSI in this case is a "filter". The fact that it's not oversold is objective by traditional understanding... whether it MATTERS in this case is "subjective".

If it turns out that the "matched low" criterion was correct... passing up the trade because the "RSI was not oversold enough" was a mistake.

Agree, but what if your method describes only "passing" up a matched low when RSI isn't oversold, only on option expiration day?

 

[Scataphagos]

Agree, but what if your method describes only "passing" up a matched low when RSI isn't oversold, only on option expiration day?

Question the "option expiration day" thingy.... If you plan to "risk 4 points for the perceived opportunity to make 12+ points", the "day" shouldn't make any difference. Being flat in front of an event... like the opening for options or in front of Fed day... but those are just for "shorter-than-day" periods. Once the reaction to those events has waned (and that doens't take all day), back to business.

Even with the Fed day phenomenon... I'm almost always flat going into the announcement and Fed statements afterwords, but that's mostly because the ES can jump 10+ points in an instant.. and any stops you have may not be executed well.

 

[Cswim63]

How many of you have put on a trade, then felt either nauseous or like something bad was about to happen? If I put on something and it feels really bad, I get out. I don't look at the chart and try to justify it regardless. Setup, no setup, whatever. Just puke it out.

 

[BONECRUSHER]

Question the "option expiration day" thingy.... If you plan to "risk 4 points for the perceived opportunity to make 12+ points", the "day" shouldn't make any difference. Being flat in front of an event... like the opening for options or in front of Fed day... but those are just for "shorter-than-day" periods. Once the reaction to those events has waned (and that doens't take all day), back to business.

That's the problem on expiration day...my risk will be more like 6 points and the reward about the same, yet my high win rate always disappears because of weird chopping price action. When expiration day is trending more, my setups tend to not kick in at all. So, I give myself a holiday.

 

[murray t turtle]

Trading is a business, where it is better to move slowly and to make money step by step. Hasty actions and wrong strategy may lead to losses. Sometimes not to trade is the best strategy. Do you agree with it? Do you have such "non-trading day"?

Yes+ yes; especially when profits run.Wisdom is profitable to direct; NOT a prediction