Practical Checklist of 15 Situations When Traders and Investors Should Avoid Making Trades. Trading Psychology, Emotional Control, and Capital Protection in Global Markets.
Why This Matters: Overtrading as a Hidden Cost
In global markets—from US and European equities to currencies (FX), commodities, and cryptocurrencies—losses often stem not from an incorrect forecast, but from a poor state of mind. Overtrading turns volatility into a personal enemy: you pay spreads and commissions, worsen your entry price, amplify leverage, increase the frequency of mistakes, and reduce the quality of decisions. For both investors and traders, discipline is not a moral category but an element of risk management and capital protection.
The Principle of ‘Do Not Trade’ — A Quality Filter, Not a Prohibition
The phrase ‘do not trade’ may sound radical, but its meaning is pragmatic: trading is a privilege that you earn only after passing certain filters. In an environment where news, social media, and ‘hot ideas’ from the US, Europe, and Asia create constant noise, your trading plan must function as a gatekeeping system. If the filters are not passed, the trade does not deserve to exist—even if "it seems like the right time."
- Objective of the Trader's Checklist: to reduce the proportion of emotional trading and to increase the percentage of planned trades.
- Outcome: fewer trades, but higher expected value and a more stable equity curve.
- Key KPI: the quality of executing the trading plan, not the number of entries.
15-Point Checklist: When ‘Not Trading’ Is the Best Trade of the Day
Use this list as a pre-trade check. If even one item triggers, you hit ‘Pause’ instead of ‘Buy/Sell.’
- If you urgently need money — do not trade. Urgency breeds excessive risk, leverage, and an attempt to "speed up life" with the market.
- If you feel excitement — do not trade. Excitement disrupts risk management and turns a trader's discipline into a game.
- If you do not feel like trading — do not trade. Coercion reduces focus and quality of execution.
- If you don’t see good opportunities but are desperately trying to find them — do not trade. This is a classic scenario of overtrading.
- If you fear missing a trade (FOMO) — do not trade. Fear of missing out almost always leads to worsening entry prices and late decisions.
- If you want to take revenge on the market (revenge trading) — do not trade. Seeking revenge on the market ensures a series of losing trades and excessive leverage.
- If your intuition warns you “not worth it” — do not trade. Often, this is a signal of an unnoticed violation of your trading plan or an unaccounted risk.
- If you are upset or depressed — do not trade. Negativity distorts probability assessment and increases the tendency to "force" a trade.
- If you are euphoric — do not trade. Euphoria creates an illusion of control and leads to excessive risk.
- If you are tired, sick, irritated, or preoccupied with personal matters — do not trade. Fatigue reduces reaction time, memory, and discipline.
- If you read somewhere “now is the best time to trade” — do not trade. Others’ statements do not replace your model, your risk profile, and your time horizon.
- If you missed the entry and want to “jump onto the last wagon” — do not trade. Chasing movement is a frequent source of poor risk/reward ratios.
- If the trade does not fit into your trading plan — do not trade. Without a plan, you are trading emotions, not ideas.
- If you do not understand what is happening in the market — do not trade. Uncertainty in market conditions (trend/flat/news spike) increases the likelihood of mistakes.
- If you have already reached your limit of trades for the day — do not trade. A limit is a part of risk management and protection against overtrading.
Access Rule: Only trade when you run out of reasons not to trade. This is the core psychological protection of capital.
Transforming the Checklist into a System: 30 Seconds Before Entering
To prevent trading psychology from remaining a "pretty idea," turn it into a procedure. Before each trade, answer "yes/no" to four questions:
- State: Am I calm and focused, without FOMO or a desire to make up for losses?
- Plan: Is this trade from my trading plan, with a clear scenario and stop-loss level?
- Risk Management: Is my stop known, along with position size and percentage risk of my capital?
- Context: Do I understand the market mode (US/Europe/Asia), liquidity, and volatility right now?
If at least one answer is “no,” the trade is prohibited. Such simple logic drastically reduces the share of emotional trading, especially during periods of news turbulence.
Risk Management Versus Emotions: What to State in Your Trading Plan
A trading plan is a contract with oneself. It should be concise, actionable, and measurable. For investors and traders operating in global markets, it is sufficient to outline the following rules:
- Risk Limit Per Trade: a fixed percentage of capital (for example, 0.25–1.0%), without exceptions.
- Daily Stop Limit: the level of losses after which trading ceases until the next session.
- Daily Trade Limit: a predetermined number of entries; exceeding this is a sign of overtrading.
- Entry Standards: setup criteria, confirmation, and conditions for ‘do not trade.’
- Prohibition of “Chasing”: no increasing leverage or doubling positions after a loss.
These points convert a trader's discipline into technology: emotions remain, but they no longer have the right to govern volume, leverage, and trading frequency.
The Global Context: Why Noise Is Particularly Dangerous for Investors
The information flow surrounding US equities, European indices, Asian markets, oil, and currencies creates the illusion that “something unique is happening right now.” In reality, uniqueness often pertains more to headlines than to your risk profile. When you react to every impulse, your strategy devolves into improvisation. And the higher the volatility, the faster overtrading erodes capital—through worsening prices, slippage, and a chain of “emotional” decisions.
The psychology of trading here is simple: you are not obliged to participate in every movement. You are obliged to protect your capital and act according to your plan.
Mini-Recovery Protocol After a “Blown” Day
If you violate the rules (exceeded the limit of trades, traded out of FOMO, or tried to make up for losses), a short protocol is needed to regain control:
- Stop Trading for 24 Hours or until the next session, regardless of the “opportunities.”
- Analyze 3 Facts: What did I feel, which rule did I violate, and what was the cost of the violation in monetary terms and percentage of capital?
- One Corrective Point in the trading plan (not ten): for example, reduce the risk per trade or cut the number of trades.
- Return with Minimal Risk on the first 3–5 trades to restore execution discipline.
This way, you turn a "failure" from an emotional drama into a managed risk management process.
Final Thought: Discipline as a Competitive Advantage
In highly competitive global markets, an advantage is rarely created through a “super idea.” It is established through a stable process: trading plan, risk management, trade limits, and the ability to say “do not trade” at the moment you want to press the button. The 15-point checklist is a practical tool that filters out impulsive decisions, reduces overtrading, and helps investors and traders preserve the most important asset—capital and mental clarity.
