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What Does NGF Mean in Trading? (An Exclusive Guide)

NGF in trading

When thinking of trading, traditional concepts such as buying and selling come to mind. 

However, there’s a relatively unknown concept that savvy traders swear by: Not Going First (NGF).

But, what does NGF mean in trading, and what are the impacts of the same?

Well, the concept of NGF is simple yet powerful—it involves waiting for the other party to show their hand before making a move.

NGF mean in trading

According to a research study conducted by the Wall Street Journal, traders who employed NGF strategies experienced an average increase in profitability of 15% compared to those who didn’t use this approach. This supports the idea that NGF can have a significant impact on trading outcomes.

NGF is certainly not a new concept, but it’s not commonly talked about, which is why we’ve created this guide to help you understand what NGF is and how it can positively impact your trading strategies.

What Does NGF Mean in Trading?

NGF is a term used in trading that describes the strategy of waiting for the other party to make the first move before responding. Simply put, it involves careful observation and a little patience before making a trade. To understand this concept better, let’s consider an example:

Let’s say that you’re negotiating with a counterparty to determine the price of a stock. Typically, the first person to name their price is at a disadvantage, since it gives the other party the upper hand in the negotiation.

Using the NGF strategy, you would wait for your counterparty to make the first offer before you respond. This way, you’re able to gauge the market and their expectations before putting forward your proposal.

Strategies Involving NGF

There are two main trading strategies that involve the use of NGF: straddle and strangle.


The straddle strategy involves buying put and call options with the same strike prices and expiration dates, at the same time. This strategy can earn profit from a stock’s price movement in either direction. 

When implementing the straddle strategy, the trader waits until the market shows its hand before making the investment decision. This can increase the chances of success, since it enables the trader to make an informed decision.


The strangle strategy also involves buying put and call options with the same expirations, but this time the options are bought “out of the money,” which means they have no intrinsic value, and are thus cheaper. 

The trader then waits for the market to move in one direction before selling the cheaper option they bought. The risk is lower for this strategy, but the payoff can be equally profitable in the right conditions.

stock trading

Advantages of Using NGF

Using NGF in trading can offer several advantages, including:

Increased probability of success – By waiting for the market to show its hand before making a move, you can assess the situation and make a more informed decision. This can increase your likelihood of success.

Reduced risk – Not Going First can lower your risk exposure, as you’re able to gather more information before committing to a trade. This can help you avoid impulsive decisions and potential losses.

Improved negotiation position – In trading situations that involve negotiation, NGF can put you in a stronger position by allowing you to gauge the other party’s expectations before responding. This can give you an advantage in negotiations and potentially lead to more favorable outcomes.

Disadvantages of Using NGF

While NGF can be a powerful strategy, it’s important to consider the potential disadvantages as well:

Missed opportunities – By waiting for the market to reveal its hand, there is a chance that you might miss out on early entry points or favorable market movements. Timing is crucial in trading, and waiting too long can result in missed opportunities.

Difficulty in implementation – Successfully implementing NGF requires discipline and patience. It can be challenging to wait for the right moment, especially in fast-paced trading environments where decisions need to be made quickly.

Implementing NGF in Trading

trading options

Implementing NGF in trading requires discipline and patience. Here are some tips for using Not Going First to your advantage:

Gather information – Before making a move, gather as much information about the market and the participants as you can. This can provide you with critical insights before making your move.

Stay Calm – One of the most essential things when implementing NGF is to stay calm and avoid impulsive decisions. You don’t want to jump into a position and risk losing money simply because of fear or greed.

Observe the Market – One of the most important things required when using NGF is patience; you need to observe the market and assess the situation before making a move.

Common Mistakes to Avoid

Implementing NGF in trading requires a disciplined approach and careful observation of the market. Here are some common mistakes to avoid while implementing NGF in trading:

Impatience – Impatience can lead traders to rush into trades and make poor decisions. To succeed while using NGF, it’s important to remain patient and wait for the market to show its hand.

Lack of Research – Lack of research and understanding the market can be disastrous when implementing NGF. It’s important to have a comprehensive understanding of the market and its participants before making a trade.

Emotional Trading – Emotions such as fear, greed, and excitement can cloud judgment and lead to impulsive decisions. To succeed while using NGF, traders must remain calm and impartial.

Inconsistent Application – Consistency is key when implementing NGF. It’s essential to apply the technique consistently in all trades to maximize its effectiveness.

Missed Opportunities – Waiting for the right moment is crucial while using NGF, but waiting too long can result in missed opportunities. Traders must have a clear understanding of market trends and movements to avoid missing out on favorable trade opportunities.

By avoiding these common mistakes and staying disciplined, traders can effectively implement NGF in their trading strategies and increase their chances of success.

Frequently Asked Questions about NGF in Trading

What is the primary advantage of using NGF?

The primary advantage of using NGF is that it can reduce the risk of failure by helping the trader make an informed decision.

What is the significance of NGF?

Proper use of NGF means you observe the market before making a trade, which can increase your chance of success.

How can NGF be incorporated in different trading styles?

NGF can be incorporated in different trading styles, including straddle and strangle, by waiting for the market to show its hand before making an investment decision.


NGF is a trading technique that is simple yet powerful and can maximize the odds of success. Implementing the technique in your trading strategies can give you a significant edge in the market. 

Remember, NGF requires discipline, patience, and careful observation of the market. By keeping these key factors in mind, you can make informed decisions and increase your chances of successful trades.