I assume if you are reading this you have an interest in the market, whether you are a trader, investor or both. I also assume you have seen how volatile the market has been, particularly over the past several weeks. Not only has there choppy and sloppy action from session to session, but also many moves that have been extended both ways. In addition, the closes have been erratic at best. The intraday action has been just as unpredictable with early buyers’ enthusiasm slowly surrendering to sellers to end the day and vice versa. Just take a look at Monday, Jan. 10, for an example of volatility that bled into the following day.

Hand Sitting

When I talk to option traders and investors, I have found the most successful ones know when to put on and take off positions and when to sit on their hands (not trade or invest). I cannot lie when I say I personally have found this current market universally a little more difficult than most. For the most part, traders I have talked to agree and have asked me what they should do or consider; and I tell them not trading is always an option.

The Market Will Always Be There

The market and potential opportunities will always be there…I promise. But as a trader, particularly a full-time trader, you sometimes feel the need to trade every single day. You can’t make a lot of promises when it comes to trading, but I guarantee you do not have to trade every day. As traders, we try to always put the odds in our favor. If you do not feel the odds are in your favor, why trade?

Many Traders Cannot Help Themselves

The reason we force trades is the psychological need to be right and justify our reasons for trading. Forcing trades or making trades that are more like guesses is not going to develop you into the trader you want to be. And let’s be honest, how many trades you have forced, whether it be due to uncertain market conditions or after a losing trade, have worked out?

Although this is a trading tip that will most certainly not make you money and increase your P&L, sitting on your hands and doing nothing at times when there is not a clear advantage can save you a lot of money and frustration. That I can promise you.

John Kmiecik, Market Taker Mentoring