Have you ever found it stressful to go back to trading after taking a well-deserved vacation? Well, you're not alone. A lot of traders I've had conversations with find it hard to get back on the grind especially after coming from a long vacation away from the markets.
Most of these traders are usually overwhelmed by all the events they have missed and let the stress get to them. A lot of times they end up making trading mistakes due to lack of preparation and self-confidence.
Here are three tips that could help you overcome post-vacation stress in trading.
Take the time to catch up
That's right, folks. There's no easy way to understand what happened over the past couple of days but to read up on what you have missed. Don't make the mistake of assuming that the currency pairs that you're trading are reacting to all of the same market themes and will stay within their average trading ranges.
You don't even have to do a full market and chart analysis on your own like what Happy Pip did back in January. All you need to do is to read up and understand why your favorite pairs moved the way they did while you were gone.
Prepare for the trading day ahead
Go back to the time before you took your vacation. I'm sure that most of you had a whole itinerary laid out with ideas of what you were gonna do from Day 1. I'm sure you did the research, planned which tourist spots to hit up, which clubs to party at, what travel costs are going to be, etc. After all, you wanted to make the most of your vacation right?
The same holds true for trading. You gotta plan in advance and know what lies ahead. Luckily for you, the FX-men are here, day-in and day-out to help you establish a solid pre-market trading routine.
Happy Pip and Cyclopip both have weekly posts pointing out what levels to focus on for the comdolls and cross-currency pairs. In addition to that, Pipdiddy has his Daily Forex Fundamentals blog that highlights which economic data points could rock the markets. Also, did I mention that we have the sickest economic calendar on the block?
Preparing early, hopefully before the trading session begins, will help calm your nerves and give you more confidence. In addition, you won't get as stressed out because you will be less prone to surprises in the market.
Transition your trading
If you've been gone for quite some time, it wouldn't be wise to jump into the fire. Whether you're a young buck like Huck or an-oldie-but-goodie like Pipcrawler, post-vacation stress can take its toll on you.
One technique you can practice is that of trading smaller lots. If you normally risk 2% of your account on each trade, perhaps you can begin with just 1% or even just 0.50%. Your brain (and heart for that matter) may no longer be accustomed to the risk levels you were trading at before your vacation. I suggest that you build up back to that level, one level at a time.
Another good idea is to shorten your trading hours. Aside from getting used to the stress of trading again, you also have to factor in how tiring trading for long hours can be. You may no longer be used to trading 6 to 8 hours straight, resulting in poor decisions near the end of your trading session. Try beginning with trading half the session and work yourself back up to pre-vacation levels.
These are just a few tips to help you get back on track after a long vacation away from the markets. Do you have any other useful tips and ideas? Share them with your fellow traders by hitting up the comment box below!
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- Overcoming a Trading Burnout 14:00 29 March 2013