As I have often said, trading and making money is not easy. Most traders, including option traders, will never consistently make money. Now I am not here to make you feel bad. If you have traded before, you have probably already done that to yourself. I am here to remind you that when you don’t feel you are putting the odds on your side, you should consider not trading.

The market has been extremely volatile with potential breaking news moving stocks higher and lower the next trading session. It is frustrating as a trader to be up on a position for a short amount of time and suddenly be down big the next session because of the market changing. I tell my students to use small contract size and consider smaller profit targets too.

But in addition, no one says you need to trade. Some of the best trades you make are the ones you don’t put on. I often ask my students to look at a chart and tell me what has a better chance of happening. If you cannot tell me, what does that tell you about entering a position with your hard-earned money? There is always some amount of luck involved in trading. But these days, it seems like it is an extra amount of luck. To me, that is grounds to trade less.

Before entering your next trade, ask yourself if you feel the odds are on your side within reason. If the answer is no, consider another trade or strategy or not taking a trade at all. You can’t make money as a trader if you do not trade, but forcing trades will not get you where you want to be as a trader either.

John Kmiecik, Market Taker Mentoring