When Not To Trade….

Whatever type of Trader you are, there are some periods or points in your life when it probably isn’t in your best interest to trade and I’m not referring to unpredictable economic events such as FOMC and NFP etc or non-favoured days of the week or month.

Profitable trading nearly always relies on thorough market analysis and timing and being in the right mind set, rested, fit and alert to all the possibilities and prepared to have the courage of your own conviction to take the trades that you see.

Over the years I have learnt that there are definitely times in your life when it isn’t in your own interest to be trading and that isn’t just the likely unprofitable outcome but also in terms of one’s relationships and mind set.

Such events are:


Births, Deaths, Marriages, Separation & Divorce, Serious Illness (Covid?), Moving Home, to name a few, maybe even take the day off for Birthdays.  All these events impact upon your ability to focus properly as a trader and if you are focussed on the markets instead of your family or friends, then your relationships will likely suffer.  Relationships should come first, after all the markets will be there to trade tomorrow, next week, next month and next year and better to have the support of your loved ones and friends than have them fight against it, which will most likely impact on your trading mind set.

Having just experienced one of these events myself, there wasn’t a chance I could trade well, if at all:  an unexpected and sudden death of a close relative, with a subsequent police investigation, a Coroner’s Inquest, then the funeral to arrange and the need to start dealing with that person’s Estate.  Suddenly 6 weeks had passed, during which I had to be totally focussed on dealing with the issues at hand and trading had to take a definite back seat.

Half the time you may not know that such an event is going to happen but you can be sure that at some point in your life time that one will occur.  Does your Trading Plan cater for such an event?  What can you do to mitigate its effect?  Do you have a financial cushion to see you through such a time?  If you are Professional Trader, does your employer recognise such events and what is their policy?  If you don’t know, then find out before such an event occurs.  At least then you will be able to manage your expectations better and know what is expected of you and your employer.

Some events are joyful, some sad and some result in sleep deprivation (babies!), the latter can have a major impact on your P&L, so if you are tired and have to trade then maybe reduce your risk accordingly.

If you have longer term Swing Trades open and are in the money when a major life event occurs, then you can always let them run to their natural conclusion, making sure you have a Stop Loss set (1% Risk) and realistic Take Profit Limit Orders set in the market, once that is done then forget about the trade(s) until you are able to return fully focussed and refreshed.  The only thing you may need to do at some point is move your Stop Loss to Break Even or better.

If you do have to take an enforced break from trading for whatever reason, you may be surprised by what you see in the charts that you didn’t see before, when you return. Plus, I would advise spending a few days just analysing and watching the markets in order to get a better feel of what is going on, before you pull the trigger on the next trade.

Top Trading Tip:  If you are experiencing a major life event then my advice is don’t try and trade as well, focus instead on dealing with it, or enjoying it and on the people that matter in your life.  It will reduce your stress, help your relationships, and protect your trading capital from unnecessary losses.  Close any day trades and protect or close any open longer term swing trades.  If you’re tired (babies!) but still have to trade, then maybe reduce your % Risk per trade and/or the number of trades you take.  Remember it is a trader’s first priority to protect their trading capital because without it you can’t trade.