One of the most important things that successful traders know is when not to trade. It is just as important to know when to stay in cash as it is to know what a correct entry looks like. Some of the best calls I ever made in my trading career was simply not to trade when a trend and an edge was not apparent. Rich traders do not trade every day, they trade when it is the right time to trade and find other things to do in choppy, trendless, markets.

  1. Trend traders should be in cash when the market is extremely volatile.
  2. Investors should be in cash during bear markets.
  3. Day traders should not trade during flat markets they need volatility.
  4. Can Slim Investors should not be taking entries when the market is in a confirmed downtrend.
  5. I believe that trading through earnings announcements is gambling the vast majority of time, it is very hard to get an edge through an earnings announcement anything can happen.
  6. Option sellers have very high risk when the markets are very volatile.
  7. Long option strangles and straddles do not work in flat markets.
  8. In range bound markets most trend followers are unprofitable most of the time.
  9. Momentum traders do not make money in a market that has many break out failures.
  10. Darvas traders do not make money in markets that lack monster stocks. They need innovative world changing stocks that are leaders in a market uptrend.