Trading involves risks, no matter what market you are in. It is important that you know the importance of timing when it comes to trading. Not only should you know when to trade given certain circumstances, you should also know when not to.

When Not To Trade

There are instances in the market when a certain trading method or strategy does not effectively work. No matter what strategy or method that a trader employs, it is not always perfect. There can be many days where trading will not work. In such times, the wise trader will know that it is a good time not to trade.

Importance Of Not Trading

The wise traders know how important it is to know when and when not to trade. Novice traders often, out of enthusiasm for earning more and more, try to increase their trading activity even when they find themselves losing in the process. They believe that increased trading will cover for the losses. This can be a devastating mistake for some traders since it can possibly result in mounting losses that may be quite difficult to get over in time. They would have been better off not trading at all to conserve capital and avoid the losses.

Know Your Trading Style

The only way to know when and when not to trade is if you understand your own trading style and its strengths and weaknesses. You should know how it performs in different market environments. Having this insight will help you determine if the time is best to trade and when it is crucial not to. This will help you survive potentially damaging losses and even protect your capital and profits.