One of the most difficult things for traders to learn is…
When NOT To Trade.
If you’re new, that might seem strange.
After all, when you decided to learn how to trade, you had one goal in mind…
To use the markets to make money.
And when everything works, it’s a very powerful feeling.
But we all know…
With great power comes great responsibility.
Sometimes it’s better to sit on your hands.
There are several reasons why you shouldn’t take a trade.
Today I’ll share one way I decide whether to take a trade…
Plus, 2 examples that will help you understand why top traders choose NOT to trade.
Table of Contents
The Setup
Over my 20+ years of teaching I’ve said it thousands of times…
Sometimes the best trade is no trade at all.
But how do you know when not to trade?
Through trial and error I developed a mental model that I’ve used for years.
Eventually, I wrote it down and started teaching it to students.
Today, it lives on as…
The Trader Checklist Calculator
The Trader Checklist Calculator includes 7 indicators I use to decide whether to take a trade.
- Pattern and price
- Risk-to-reward
- Ease of entry and exit
- Past performance or history of spiking
- Time and personal schedule
- Catalyst or reason the stock is moving
- Market environment
In this video, I use the Trader Checklist Calculator to show how I prepare for a trade:
When Not To Take A Trade
Now that you’ve watched the video, use the calculator every day.
Over time it will become second nature.
That said, there are times you shouldn’t trade even when the numbers add up.
For example…
Matt Monaco Doesn’t Trade On Fridays
What does the day of the week have to do with being a top trader like Matt?
Remember this every day before you journal your trades…
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Your Data Tells a Story
Recently I sat down with Matt for an interview.
We talked about his journey to $3 million in trading profits and what it was like to make $1+ million last year.*
During the interview Matt shared that he no longer trades on Fridays.
Why? Because this year he’s down $200k. But ONLY on Fridays.
The rest of the week (and year)… he’s profitable.
That level of clarity doesn’t come from evaluating any single trade setup.
It comes from reviewing ALL your data to find out how you can improve.
Be sure to watch the entire video because Matt shares a TON of great information (including WHY he thinks he’s down on Fridays).
Here’s another example I mentioned in this recent post…
Even Jack Kellogg Takes Time Off
Jack is one of the most successful traders I know. What he’s done in under a decade is incredible.
But sometimes Jack pushes himself too hard. And sometimes that leads to bigger than necessary losses (especially after big wins).
To put this in perspective: Jack is not alone.
It’s actually pretty common.
If you ask almost any trader about the trades leading up to a big loss, they’ll say things like…
“I was crushing it. Biggest win of my career. Best week, best month, I felt like I could do anything.”
Then…
“Animal Spirits”
Economist John Maynard Keynes was the first to describe gut feelings and emotions in economics as “spiritus animalis” or animal spirits.
Like it or not, emotions and instinct affect every trader (right or wrong).
A study led by neuroscientist John Coates shows that traders are more likely to take a big loss after a series of big wins.
And it’s not just a game of odds. It’s naturally occurring steroids that we can’t control.
According to Coates, “chronically elevated steroids may promote irrational risk-reward choices.”
And THAT leads to big losses.
The difference between top traders like Jack and Matt…
… and traders who get lucky but then get too cocky and blow up…
Is recognizing when “animal spirits” are getting in the way of holding on to the money you’ve made.
The better you learn when NOT to trade…
The more trading profits you’ll keep.
This Is Your LAST CHANCE
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Millionaire Moves
Big props to Strati, one of my most trusted inner circle members who went from part-time trader to now being a confirmed millionaire.*
How a Gym Teacher Built a $1 Million Trading Career
Pay close attention to the section on risk management and the false sense of security.
Strati is learning to push hard but still avoid catastrophic losses by knowing when NOT to trade.
On My Radar
I’m super proud to announce that we just opened Karmagawa’s 66th school in Bali.
Such an emotional day today opening a new @karmagawa school as this is our 66th school here in #bali and 132nd school worldwide…I’ll post more soon but right now I gotta pass out for a few hours!
Retweet if you promise to be my next millionaire student and build schools too! pic.twitter.com/MUs5sAAI4y
— Timothy Sykes (@timothysykes) April 30, 2026
Key Takeaway
If you want to grow your trading account much faster, learning when not to trade is one of the most important steps you can take.
For me, it’s about understanding that I sometimes overtrade. My busy travel schedule actually helps.
It keeps me from taking trades that I would take if I were in one place all the time.
Trading from different time zones also means I have to be extra careful about which setups I trade.
As you trade in the coming days, see if you can find reasons NOT to trade. You might be surprised at how quickly it improves your trading.
Cheers,
– Tim Sykes
*Past performance is not indicative of future results
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