How to Trade When Market Signals Don’t Agree

*Bob Iaccino, Chief Market Strategist and Co-Founder of Path Trading Partners, joins us live every Thursday from 11am ET, as our risk management educator. With 30 years' experience working as an active investor in equities, commodities, futures and FX there are few better to talk on the subject of risk management.

Bob has developed a method for breaking down his key fundamentals of risk management, in a way that he thinks retail traders can understand and use to get actionable insights to bring into their own trading. Below are some excerpts of Bob’s thoughts from a recent live session.

Looking Beyond the Headlines

One of the first lessons I learned as a trader was that markets rarely give you a single, clear signal. More often, they throw conflicting data points at you, and your job is to weigh them properly. That balance between conflicting indicators is where the real skill comes in.

For example, there are days when the broader market is flashing bearish signs, yet a sector or individual stock is showing undeniable strength. I have had situations where an index was making lower highs on the daily chart, while a sector within it was pushing through resistance. In these moments, I do not rush to declare one side “right” and the other “wrong.” Instead, I step back, analyze the time frames, and identify whether the strength is sustainable or just noise.

Time Frame Alignment Matters

When I face conflicting signals, one of my first steps is to line up multiple time frames. Using TradeZero’s charts, I start with the weekly view to get a big-picture trend. Then, I zoom into the daily and intraday charts to see if the momentum supports that trend. If I find that the weekly and daily charts are in agreement, I am more confident in the setup, even if the intraday chart is choppy.

A common mistake traders make is giving equal weight to every time frame. The truth is, the higher the time frame, the more reliable the signal tends to be. If the weekly chart says one thing and the five-minute chart says another, I trust the weekly every time. That does not mean I ignore the shorter time frame, as it still guides my entry and exit, but I do not let it dictate my overall bias.

Interpreting Volume and Market Breadth

Another layer of confirmation I look for is volume and market breadth. A breakout without volume is like a promise without follow-through, making it harder to trust. On the TradeZero platform, I watch for surges in volume that align with the move I am trading. If a stock is breaking resistance but volume is weak, I will either pass on the trade or reduce my size.

Market breadth also plays a big role. I might see a stock breaking out, but if market breadth indicators are showing that most stocks are declining, I proceed with caution. Breadth can give you insight into whether a move is part of a larger trend or just a one-off reaction.

When to Step Aside

Sometimes the best trade is no trade at all. If the signals are too mixed and I cannot find a clear edge, I would rather preserve my capital and wait. Patience is one of the hardest trading skills to develop, but it is also one of the most profitable. I have learned the hard way that forcing trades during periods of conflicting signals often leads to unnecessary losses.

I treat sitting on the sidelines as an active decision, not a missed opportunity. The market will always be there tomorrow, but your capital will not be if you keep taking low-probability trades.

Trading psychology plays a huge role when market data is mixed. The human brain does not like uncertainty, it craves clear answers. In trading, this desire for clarity can push you into premature decisions. That is why I always fall back on my written trading plan. Having predefined criteria for entering and exiting trades keeps me from letting emotions dictate my actions.

Fear can make you overemphasize the bearish signals, while greed can make you latch onto the bullish ones. The key is to recognize those emotional biases in real time and refocus on objective analysis.

When I encounter conflicting signals, my process looks like this:

1. Check the higher time frames to determine the dominant trend.
2. Use daily and intraday charts for timing and execution.
3. Confirm with volume and breadth to ensure the move has strength behind it.
4. Decide if the trade meets my plan’s criteria. If not, step aside.
5. Stay disciplined and let the process guide me, not emotions.

By following these steps, I am able to trade confidently even in uncertain environments. Not every trade will be a winner, but by respecting the process, I improve my odds over time.

Final Thought: Conflicting signals are not a sign that the market is broken, they are a sign that it is functioning exactly as it should. The market is a constant negotiation between buyers and sellers, and your job is to interpret that negotiation with discipline, patience, and a plan.

Live Sessions (hereafter referred to as the “Content”) are produced by TradeZero. The Content may include the views and opinions of TradeZero and a third-party participant, Bob Iaccino. Bob Iaccino is compensated by TradeZero for participating in the Content. Mr. Iaccino’s trading experiences and accomplishments are unique, and your trading results may vary substantially from his. TradeZero is not responsible for and neither affirms nor endorses any of Mr. Iaccino’s views or opinions expressed in the Content. TradeZero makes no representations or warranties with respect to the accuracy of the Content or information available through any referenced or linked third party sites. The Content has been made available for informational and educational purposes only and should not be considered trading or investment advice or a recommendation as to any security.

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