Getting back into the game after an absence; how getting back into trading should prove to be a profitable decision
It’s quite a common occurrence for us to take breaks from trading. In point of fact in many ways it can be a very healthy and cathartic exercise to simply stop trading, to re-evaluate your personal circumstances, take a ‘time out’ and come back at a later date. Some traders will take years off from engaging with the market and will testify that when they did come back they felt far stronger mentality and had experienced sufficient time to “put the world to rights” in relation to their overall trading plan and strategy.
How long is too long?
Unless you’ve been away on a desert island with no internet access for ten years or so then you’ll quickly realise that not much changes in the FX industry in particular. Spreads have got tighter, commissions smaller, execution is faster. Slippage is less as the ECN/STP model has been adopted, by all bar the market makers, who are being outflanked by those with better offerings. And then there’s copy trading in all its guises but really, in terms of developments over the past few years, that’s it. There really is no too long to have been away. The industry has not left you behind…
What have I missed?
In short not a lot as we’ve already emphasised. The industry has improved, albeit these improvements are micro improvements. Communication had got better. The market is still the market and if you need to suddenly get up to speed, with all things market related, then do this – Drag up a monthly chart, then the weekly, then the daily, now you’re getting the idea. Time frames will be showing trends and ranges just as they were last time you traded. You’ll still see the whipsaws and have your own ideas as to how best to avoid them with your perfected new trading plan.
Have I grown emotionally?
We’ll bet you’ve grown considerably during your temporary sabbatical. Both in terms of emotional growth and mental growth you’ll be a lot better equipped to tackle the markets the second time around. Crucially you’ll have a lot more emotional control over your decisions, moreover you’ll have a far more realistic idea of what’s really achievable based on the account size you’ve managed to amass. Rather than being seduced by ridiculous claims of fortunes on blogs, forums, or through adverts, you’ll have developed targets in your trading plan based on trading evidence that you’ve witnessed taking place.
Has my attitude changed to risk, mm, strategy and my trading plan?
Where once you may have risked 5% upwards on a single trade in the early days of your fledgling career, now you’ll be of the opinion that risk and money management are key to your survival and account growth. You’ll probably be risking no more than one percent per trade and have no more than three percent total risk and exposure in the market at any time. Where once you believed strategy was everything, you’ll now accept that the 3Ms of; money management, mind and method rank equally as core ingredients to your success. All your plans and ideas will be committed to your own personal trading bible in the form of your highly personal trading plan.
I have a better understanding of what’s required
This is a fascinating observation and key aspect of self-realisation. You’re now entirely comfortable with the whole process and you look at growing your account by perhaps 100% annually and know exactly how to go about it. You have clarity and you have a new found purpose. For example, you’ll know the kind of R:R you’ll be working too and you’ll know amount of trades you’ll have to take in order for the probabilities to work in your favour to reach your goals.
Am I more confident and relaxed than before?
Yes you are and there’s one key reason; you’ll be placing far less pressure on yourself to perform. As you’ve reined in your previous, far too lofty ambitions, to now achievable targets, you can step back and let the trades and the market come to you. A process that was entirely alien to you in your first foray into trading when you chased the market, firmly believing that it was there to be battled with. You now face every trading day refreshed with no fear and with an energized frame of mind; you’ve a far better handle on what’s achievable and how you’ll go about finally realising your realistic ambitions.