Spotting When the Market Is in Your Favor

One of the most overlooked skills in trading is knowing when to stay active and when to sit back. Most new traders think every day is a good day to trade. That is how accounts get drained. The truth is, the market has seasons, rhythms, and conditions that either set you up for success or stack the odds against you. The difference between consistently growing an account and constantly digging out of a hole often comes down to whether you can recognize when the market is in your favor.

Why This Matters

Trading is not about being right all the time. It is about stacking small edges in your favor and avoiding the situations where the odds tilt against you. If you only take trades when the environment lines up with your rules, you will naturally cut out the lower-quality setups that sabotage most traders. That discipline is the dividing line between the people who slowly compound their accounts and those who churn them into the ground.

My Two-Step Filter

I use a mix of objective cues and intuitive cues to decide whether the market is in my favor.

Objective Cues

Objective cues are the things you can measure. They are factual and repeatable. Here are some of the most important ones I use:

• Seasonal trends: If a stock has shown strength in a specific month over 15 or 20 years, that matters. History does not guarantee the future, but it does give weight to probabilities.

• Anchored VWAP: I use VWAP anchored to earnings, swing highs, or lows to see where real buying and selling pressure has taken place. If price is respecting those levels, I know institutions are likely in control.

• Volume and volatility: Strong setups usually come with above-average volume and manageable volatility. If volatility is spiking, that is often a red flag. If it is calming down while price trends, that is often a green light.

• Market context: I do not trade in isolation. I always check the S&P 500 and Nasdaq. If the broader market is trending in one direction, it often helps confirm or cancel my individual stock idea.

Intuitive Cues

Over time, you develop a trader’s intuition. I am not talking about gut feelings with no basis. I am talking about the pattern recognition that comes from looking at thousands of charts. Eventually, you begin to notice when a setup looks just like the ones that worked before. Maybe it is the shape of the consolidation, the way it is riding VWAP, or the smoothness of the trend. This kind of intuition only comes from experience and journaling. If you log your trades and study them, you will develop a mental catalog of what good trades look like. That catalog is a huge advantage when spotting whether the market is on your side.

Intuition also develops in layers. First you will see obvious patterns, like breakouts or reversals that happen cleanly. As you gain more time in the market you begin to sense the difference between a breakout with conviction and one that will likely fade. You also get a feel for pace and rhythm. For example, when volume and price movement have a steady, orderly quality, it often means institutions are participating. If the chart feels jumpy and inconsistent, it usually points to retail noise that can shake you out.

Another way intuition grows is by reviewing your own mistakes. If you keep a journal of trades that failed, eventually you will spot repeating warning signs. Over time your brain will flag them in real time, almost like a built-in early warning system. That prevents you from repeating costly errors. This combination of positive pattern recognition and negative pattern avoidance is what sharpens your instinct to know when the market is truly in your favor.

Red Flags to Watch For

Just as important as spotting green lights is being able to call out the red flags that tell you to stay away:

• Choppy sideways action: If a chart looks like a EKG reading, skip it. Choppy action will bleed you slowly. The longer you sit in a sideways trade, the more commissions, spreads, and time decay eat into your account. Instead of small quick losses, you suffer a slow drain that saps both capital and mental energy. These are the kinds of trades that look harmless at first but can quietly stall your growth for weeks.

• News-driven spikes: Big gaps caused by breaking news are often traps. Let the dust settle before getting involved. Headlines may cause a violent pop or drop, but without underlying confirmation those moves rarely last. Many traders rush in thinking they are catching momentum, only to be left holding the bag once the market normalizes. Waiting through the first session after a news spike often reveals whether institutions are actually buying or selling, or if it was just noise.

• Failure to respect levels: If price is slicing through anchored VWAP levels without hesitation, institutions are not defending positions. That means higher risk. Levels that once acted like guardrails are no longer reliable, and trading in that environment is like driving without lanes on the highway. It creates unnecessary uncertainty. Strong trades respect levels consistently; weak trades wander through them like they do not exist.

• Multiple signals out of sync: If seasonal data says bullish but the chart is printing lower highs, the conditions are mixed. I want alignment, not confusion. Conflicting signals create hesitation and second-guessing, which makes it nearly impossible to manage a trade with conviction. When too many signals disagree, the best decision is usually to stand aside. Clear alignment between seasonal patterns, technical structure, and market context will always give you a stronger edge.

My Practical Checklist

To keep myself disciplined, I use a simple checklist. A setup must meet at least three go-signals, or I pass. If I see two or more red flags, I pass. Here is a sample of what that looks like:

Go Signals:

• Seasonal trend supports the trade.

• Price is respecting anchored VWAP.

• Broader market is moving the same direction.

• Volume is confirming the move.

Red Flags:

• Choppy sideways action.

• Extreme volatility or news events.

• Price breaking through key VWAP levels.

• Conflicting signals between technicals and seasonals.

This checklist has saved me more money than I can count. More importantly, it has saved me from emotional trades. When I follow it, I do not get caught in “maybe” setups that look tempting in the moment but break down right after entry.

Why This Works

The market rewards patience. It will always give you another chance. When you only trade in conditions that are in your favor, you cut out the noise and focus on the highest-probability opportunities. Over time, that consistency compounds. Your winners add up, your losers stay small, and your confidence grows because you know you are following a process. The more you filter for quality trades, the less you have to rely on luck or emotion to make decisions. Patience also protects your energy. Instead of burning out by chasing every possible move, you stay fresh and alert for the ones that matter. Consistency is not built in a single week or month, but across years of applying the same careful process. Think of it like building muscle through repetition. Each disciplined decision strengthens your trading foundation and makes the next one easier. Over the long run, that steady approach is what separates a trader who survives a decade from the one who flames out after six months.

Final Word

You cannot control the market, but you can control whether you step in when conditions are tilted your way. That is where consistency comes from. The traders who last are the ones who know when to wait and when to act. Learn to recognize when the market is in your favor, and you will put yourself in a position to succeed long-term.