When not to trade, and what next

The whole course was about trading deliberately. The last lesson is about the skill that is hardest to learn: not trading. No position is also a position – and often the best one.

When it is better not to trade#

• When you have no plan or the situation does not fit it. "Almost fits" means "does not fit".
• After you hit your loss limit. The plan says stop – so stop.
• When you are tired, ill, angry or euphoric. Decisions in a bad state are expensive.
• Before and during major news – central bank decisions, for example. The price can swing both ways and the spread widens.
• When the market has no clear structure. In a messy range, indicators and structure give one false signal after another.
• With money you will need. Rent, savings, loan payments – they never belong in the market.
• When it has stopped being interesting and you trade out of boredom. Boredom is an expensive reason.

What you took away from the course#

• Market structure – highs and lows show the direction and tell you where you are wrong.
• Support and resistance zones – not exact lines; breakout, retest and role reversal.
• Indicators – moving averages, RSI and volume as aids, not prophecy; they come late.
• Orders and costs – stop-market, OCO, trailing stop; fees and slippage that add up.
• Risk – position size from risk, results in R, expected value and normal losing streaks.
• Plan and journal – decisions made in advance, loss limits, review by the numbers.
• Psychology – emotions and thinking traps, which rules help against, not willpower.

How to try out your plan safely#

1. Write the plan on one page following the lesson on the trading plan.
2. Try it without money. On a demo account or just in a paper journal, make at least 50, ideally 100 trades by the rules. Work out the result in R, including costs – the first 30 to 50 trades are only a first check, not proof.
3. If the numbers make sense, move to small amounts. So small that a loss does not bother you. Real money brings emotions that paper does not.
4. Review every week and change the plan only at the weekend.
5. Accept that it may not work. Most people who trade lose money in the long run. If the numbers do not add up after a hundred trades, it is fine to stick with long-term investing.

What next#

In the academy's next courses we will look at more advanced topics – analysing several markets, managing the risk of a whole portfolio and testing strategies. Until then: a plan, a journal, small amounts and plenty of patience.