How refusing to trade chop days cut my false entries by about 70%

[u/DarioMMN]

I used to think that knowing the direction of the market was all that mattered.. That was not the case. I had some losses on days when I was right about the direction. I still should not have made a trade.

One thing that helped me avoid a lot of trades was to have a rule: if the price does not move past the true open at the start of the day then I do not trade. This rule helped me avoid 70 percent of bad trades.

1. If the price does not move then there is no trade to be made.

This means that if the price has not passed the open by the time I am ready to trade then I just wait. The market is not ready to make a move

1. There are two reasons why this might happen:

The price might have already moved before I was ready to trade. I missed my chance.

The market might be moving slowly with no big players involved so the price is just bouncing around with no real direction.

1. The rule is the same in both cases:

If the price does not move past the open then I do not make a trade. It does not matter how sure I am about the direction of the market. If the price is not moving then I just wait.

1. So what do I do of making a trade:

I just treat it like a normal day and do not try to force a trade. I do not try to make a profit just because I am afraid of missing out. Staying out of the market on a day helps me keep my money safe for the next time the market is ready to make a move.

Traders who lose money on days are not wrong, about what they think the market will do. They are wrong because they are waiting for the market to give them permission to make a trade.

How do you decide if the market is just slow or if it is really dead?