Knowing when not to trade is just as important as knowing when to pull the trigger. Many traders overlook this side of the equation and end up entering the market during periods of noise, confusion, or indecision. With Share CFDs, timing and environment matter even more because of the leverage involved and the speed at which conditions can shift.
Low Volume Sessions Bring Unreliable Signals
There are days when the market simply lacks participation. It may be during a public holiday in a major region, or ahead of a critical announcement. Whatever the reason, thin volume often leads to erratic price movements. This type of environment can be dangerous for traders relying on technical patterns or breakout strategies.
In these conditions, price may move sharply on low volume, only to reverse moments later. For Share CFDs, where traders aim to enter and exit quickly, unreliable setups caused by thin participation can lead to frustration and unnecessary losses. Waiting for volume to return often results in higher-quality trades and clearer direction.
Major News Events Can Distort Price Action
While news is part of the trading landscape, not all news days are equal. Large events like central bank decisions, earnings announcements, or geopolitical developments can create massive uncertainty. Price swings are often fast, unpredictable, and based more on emotion than structure.
This is not to say that Share CFDs cannot be traded around news, but doing so without a solid plan or without anticipating extreme volatility can backfire. Many professional traders choose to avoid entering new positions just before these events and prefer to let the initial market reaction play out before looking for clearer setups.
Market Openings and Closings Require Caution
The first and last thirty minutes of the trading day are often the most volatile. These periods are full of orders being filled, positions being adjusted, and reactions to overnight news. For experienced traders, this volatility can present opportunities, but for those without a clear plan, it can become a trap.
Traders using Share CFDs may find that spreads widen significantly during the opening and closing minutes. This can lead to unexpected stop-outs or slippage. Unless there is a strong reason to trade during these times, many prefer to wait for the market to settle before making decisions.
When Price Moves Without Context
Sometimes the market moves in ways that do not align with broader sentiment or fundamental drivers. These moves are often driven by short-term manipulation, speculative bursts, or algorithmic reactions. They may look enticing at first glance but are difficult to trust.
Traders using Share CFDs should be cautious when they cannot identify a clear reason behind price movement. Entering a trade based on a pattern alone, without context, often leads to disappointment. Waiting for alignment between technicals, volume, and broader market narrative results in better outcomes over time.
Emotional or Fatigued States Cloud Judgment
It is not just the market that must be ready. Traders need to be in the right state of mind to perform well. Fatigue, stress, frustration from earlier trades, or outside distractions can all impair decision-making. In these moments, even the best setups can be mishandled.For those trading Share CFDs, discipline is critical. Recognizing that you are not mentally prepared and choosing to step back is a sign of maturity, not weakness. Sometimes the best trade is the one you do not take.
