Whether it’s after a well-deserved month-long vacation or a self-imposed sabbatical from trading, it can be challenging to get back in sync with the markets after a big hiatus.
For one, you might not be feeling up to speed with the latest economic and political developments, so it’s tough to pinpoint which data releases or headlines might impact price action.
Either that or you’ve forgotten what it’s like to see risk sentiment shift on a dime and how to be quick on your feet when it comes to adjusting your positions.
In any case, I’ve rounded up some tips that might make it easier for you to get back in the grind after a long break from trading:
1. Read up on the latest market movers
Just as it can be difficult to navigate a new city without first checking a map or finding out what the weather might be like, it’s hard to just jump blindly in the markets while being unaware of the recent catalysts driving price action.
Of course, since you’ve also been out for a while, it’s also equally challenging to determine which news reports are big movers and which ones are mere noise.
When there’s far too much information to deal with, it might help to look at market summaries and weekly roundups instead. These usually highlight major news and top data points that have caused notable reactions among currencies or other asset classes, so you know what other traders have been paying attention to.
Lucky for you, we’ve got our FX Weekly Recap to wrap things up for the forex market and the Global Market Weekly Recap to round up the biggest drivers for equities, commodities, and crypto, too!
2. Review your trading journal
Well, at least we hope you’ve kept one for your previous trades! A trading journal can be pretty handy when getting back in the market groove after you’ve been on a break.
Not only can it remind you of how you’ve been executing your trading strategy, but it can also guide you in figuring out whether you need to make any adjustments or not.After all, a refreshed set of eyes can often be clearer in spotting potential improvements you may have missed out on when you were in the thick of trading.
Have you been setting your stops too tight? Have you been cutting your winners too early? Or have you been missing out on long-term trends by not pressing your advantage?
These are just some of the questions that you might be able to answer before picking up where you left off. Also, assuming you’re also working on the first tip above, you might be in a better position to figure out if you have to tweak your trading plan to account for current market dynamics.
3. Try a few trades on demo
If you’re not feeling confident about resuming trading immediately after a break, it’s okay!
There’s no shame in getting your feet wet again with demo trading just to make sure you’re psychologically ready to battle it out with real money again.
Remember that a crucial part of surviving in the markets is being able to stay mentally strong to weather any unforeseen price moves and to keep a level head even when negative emotions are starting to mess with your decision-making.
Just as your body feels rusty after having no exercise for a long while (Yep, we’ve all been there!), your trading muscles might need some time to warm up again if you’ve been out of the game for a bit. Take your time and work on these tips to make sure you’re in tip-top shape before jumping back in.