Once we have a proven system, our system’s profitability is not based on our personal ability to trade it. The market environment of trending, range bound, or volatile is what makes our method make money or lose money. Sometimes, we have a perfectly good system and lose money because our method is not viable. A trader should be getting fewer signals in a market that is not conducive to our system, but the few signals that we do get will likely end up as losses until the market starts to trend or establish a range. Until then, it’s not you it’s the market. The market is just not that into your trading method, system, or plan.
- You get very few entry signals. The markets just look noisy, volatile, and random.
- The trading day price action only makes sense in hindsight at the end of the day.
- You can look like a genius in the morning, and an idiot in the afternoon.
- The trend is not your friend because it tends to bend every day.
- You have to take profits at every opportunity before the market changes it’s mind.
- You start thinking that a small loss is a winning day.
- You get long and short signals on the same day when they used to happen weeks or months apart.
- Buy the dip is not profitable, breakouts fail, and buy and holders no longer look like geniuses.
- Down days are so big you double check your account to make sure you are only in cash.
- Your ability to handle losses and drawdowns becomes the most important element of your trading.
Do not trade price action that is not compatible with your signals. Be patient and wait for the price action that is right for you.