Why I Won't Trade the Easiest Setups Right Now

Most traders see a perfect setup and think they have to trade it. That's exactly backwards.

I'm looking at my screen right now, and Goldman Sachs is sitting right on a beautiful technical level. I mean, textbook stuff - we're about to pierce through recent lows, and if we do, this thing's got room to run lower. The setup is so clean it's almost insulting.

Microsoft? Same story. I've marked the $392.50 level as death…it breaks through there, and we're talking about a meaningful move to the downside.

You know what I'm doing about these setups? Absolutely nothing.

Here's the thing - I worked in charting long enough to recognize patterns. I can see when something's about to break. But I also know when the marketplace is an absolute minefield, and right now, we're in disaster territory.

The average true range in the S&Ps is running 10-12 points per minute. Think about that for a second. These aren't normal market conditions. These are 15-handle moves happening every sixty seconds. When you've got that kind of volatility, it doesn't matter how pretty your setup looks on paper.

I could execute into these trades. I've got the experience and the risk tolerance. But here's what separates experienced traders from everyone else: knowing when the game has changed.

The marketplace doesn't care about your technical levels when it's moving like a futures contract.

This is exactly the kind of session where you pull in your arms and wait.

I don't care if people in my room are pissed off and want another trade.

Do you really want to execute when the market's flying around like this?

When you can't get a decent fill because everything's moving too fast?

Look, I've been frustrated all week. Every day I come in here thinking, "Today's the day we get some clean movement." Instead, we get this slop fest - doji after doji, chopping back and forth in the same range since September.

But frustration doesn't mean you abandon discipline.

The irony is that Goldman setup I mentioned? There's no trade there anyway. No one wants to make markets in Goldman anymore. The options have gone no-trade, which means you're either dealing with retail traders who don't know what they're doing, or institutional size that's playing by completely different rules.

When the structure of the market changes, your approach has to change with it.

I've got three zero-day butterflies on right now, and I'm getting sloshed around on all of them. That's fine - I sized them appropriately for this environment. But I'd rather take controlled losses on properly structured trades than chase perfect setups in an impossible execution environment.

The hardest thing about trading isn't recognizing opportunities. It's recognizing when the conditions make those opportunities untradable.

So what do you do on days like this? You respect the average true range. You acknowledge that your normal playbook doesn't work when the market's acting like a wild child. You size down, spread your risk, and wait for conditions that actually allow you to implement your edge.

The Goldman setup will be there next week. Microsoft isn't going anywhere. But your capital? That disappears real quick when you try to force trades in conditions like these.

Sometimes the best trade is no trade.

And if you can't accept that, you're not ready for the days when the market decides to remind everyone who's really in charge.

To your success,

Don Kaufman

P.S. I've got a lot more to say about this market and what I see coming next week. I'll post on our YouTube channel, make sure to check it out after the bell.

Update your email preferences or unsubscribe here

© 2026 Disclaimer: Neither TheoTrade or any of its officers, directors, employees, other personnel, representatives, agents or independent contractors is, in such capacities, a licensed financial adviser, registered investment adviser, registered broker-dealer or FINRA|SIPC|NFA-member firm. TheoTrade does not provide investment or financial advice or make investment recommendations. TheoTrade is not in the business of transacting trades, nor does TheoTrade agree to direct your brokerage accounts or give trading advice tailored to your particular situation. Nothing contained in our content constitutes a solicitation, recommendation, promotion, or endorsement of any particular security, other investment product, transaction or investment.Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time. Past Performance is not necessarily indicative of future results.

Why I Won't Trade the Easiest Setups Right Now

0 Response to "Why I Won't Trade the Easiest Setups Right Now"

Post a Comment