When You May Not Want to Trade

VantagePoint Learning Center

When You May Not Want to Trade

Welcome to the “When you may not want to trade” Learning Session. In this session, we’ll cover possible times when you may not want to trade, including when:

Financial reports are released
World news, national disasters
National holidays
Extreme moves in the market
Choppy market conditions

Learn about possible times when sitting on the sidelines may be a better option than trading.

VantagePoint is able to forecast the markets consistently with a high degree of accuracy. It does the complex analysis of the data and performs the number crunching for you. As a trader, it’s up to you to make the final decision of what to do in the market once you’ve identified a great opportunity using VantagePoint.

That being said, there are certain circumstances where using common sense could prevent you from taking a trade even though the forecasts in VantagePoint meet your trading criteria. We’re going to cover some examples now

From time to time, the Federal Reserve will make an announcement. Based on what is said, the market could react very quickly without rhyme or reason. Therefore, when you KNOW that the Federal Reserve is making an announcement, you might want to stay out of the market that day, and even ignore a prediction because you know that the market may get really volatile in anticipation of the news being released.

World news and natural disasters cannot be predicted. That’s why we believe no tool will ever be 100% accurate in predicting the markets. But if you trade very conservatively or stay on the sidelines during such an event, you could avoid a financial disaster of your own. Sitting on the sidelines can be a great win for you.

Another example of a time to be cautious is immediately before or after a national holiday. It is important to be aware of when the exchanges are closed for these holidays. For example, you’ve identified an opportunity using VantagePoint, and let’s say there was a holiday and the markets were closed when they normally would have been open, you may want to pass on that opportunity.

Here’s another practice that you might find helpful: when you’ve identified a great opportunity using VantagePoint, before you pull the trigger to make the trade, you may want to look back at what the market actually did prior to when you’re considering getting in. There are many things to consider when looking at this information. You may want to see what’s happened in the market today, or you may want to look at past history, which you can do in VantagePoint.

If the market itself has already gone substantially in the direction that you’re considering trading, you may want to be more conservative or pass on the trade. A market rarely goes straight up or down. In a strong downward trend, there will likely still be up days and retracements. So if you’re considering getting in on the downtrend, you may want to make sure the market itself hasn’t already plummeted. If it has, there may be a retracement that that could possibly affect your trade.

You may also want to look for an extremely choppy market condition. If you look at the market itself prior to getting in, and notice that the market condition is very choppy and volatile, you may want to pass. Why take on unnecessary risk when you can pass and wait for an opportunity that looks better?

Trading is about having the odds in your favor. The more odds that you have in your favor, the better. So keep these conditions in mind the next time you’ve identified a great opportunity using VantagePoint. You’ll be glad that you did!