Coming back to trading after a three-month hiatus, I feel much more prepared

This piece was inspired by a great buddy and fellow soldier of mine. Like many others in his trade, he has struggled with the ups and downs of his profession as a ten-year trader.

Nov 29, 2023 - 16:03 Updated: Nov 30, 2023 - 15:30

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Coming back to trading after a three-month hiatus, I feel much more prepared

By Abe Abrams, CEO, TradeFxP Ltd.

A fellow soldier and dear friend of mine served as the inspiration for this article. He, a trader of ten years, has grappled with the ebb and flow of his craft, akin to countless others in his trade. Here's a brief account of his origins: He, a man of kin, now jobless, seeks to become his own master, to bask in the company of his loved ones, and to attain the existence he has forever yearned for. Having lost his job, he was compelled to cease live trading and return solely to demo trading. After three months of demo trading, he called me up to share his newfound wisdom.

When we conversed, he shared a stirring epiphany that he experienced following a brief hiatus from active trading, opting instead for simulated transactions. He said that after almost 16 years in the market, attempting to unravel its mysteries, he at last had his epiphany. All that he had gleaned from me and his own trials had coalesced into clarity.

I inquired of him, seeking permission to employ his experiences in crafting an article for your esteemed readership, for I am aware that a multitude of you continue to grapple and yearn for that elusive moment of clarity in your trading endeavors. With hope, the forthcoming insight shall aid in your attainment of an "ah ha" moment, propelling you towards the path of lucrative trading...

You don't need to trade excessively to amass wealth.

I strived ceaselessly to amass great wealth from my meager accounts. I'd toss a grand or two into a trading account and believe I'd rake in a hundred grand by year's end. He chuckled softly. In retrospect, such cogitation truly elicits laughter.

In my three-month hiatus from live trading, I discovered a profound lesson: trading sparingly can yield substantial profits. While I was away, I engaged in the art of trading with a $50,000 Forex demo account. However, my efforts were modest, as I only participated in two trades throughout that period. I made a trade, buying GBPUSD, and it brought me around 6k. Another trade involved buying gold, and it brought me around $25,000. In just three months, I managed to amass a sum of $31,000 through a mere two trades, averaging $10,000 per month. There are no losers, only two great winners. I'm content with earning $31,000 in a mere three months without exerting much physical effort, solely relying on my intellect.

Sadly, I lack $50,000 in authentic currency for trading purposes. But that's fine, for I've come to realize and witness the truth that one need not engage in excessive trading to amass great wealth! Where have you heard this before? likely from the same individual I did.

How many of Abe's articles have you read discussing low-frequency trading or the perilous demise of traders' accounts due to excessive trading? There is a reason, truly true! You fail to grasp the insignificance of your pursuit to amass wealth on a minuscule account. You become entangled in excessive trading and the compulsion to force trades instead of allowing trades to naturally present themselves.

Mastering a trading strategy is of utmost importance.

In my three-month voyage of demo trading, my focus was on trading pullbacks, a technique taught and emphasized by Abe, from whom I gleaned most of my knowledge. However, I never quite executed it with precision.

Pullbacks, I've come to understand, require purchasing a market in its descent and vending a market in its ascent. Both tasks are arduous and go against one's natural instincts when performed in the present. simple to grasp, yet arduous to enact.

When the market ascends, the urge to purchase arises, and conversely, when it descends, To truly grasp the essence of the chart, one must keenly observe its context. Does the market, in its relentless descent, merely seek solace in a temporary ascent? If so, sell when it's high, despite any reluctance you may have! Sell when the market ascends and purchase when it descends.

In the market, it is best to often engage in idleness.

It's tough to disregard or ponder over your trades on an authentic account, yet on a trial account, you genuinely abstain from ruminating on the trades as much, and more often than not, this proves advantageous in a striking manner.

I hardly glanced at my gold trade until I found myself $19,000 richer. If that trade were true, I'd have likely undermined it by now, departing with a meager gain or a loss.

We must detach from the markets, particularly after executing trades.

Arrange the trade, conduct thorough research, ensure it aligns with your standards and trading approach, establish the stop loss (at the very least) and perhaps a target, and then simply disregard the matter for a few days, if not more! It took me years—decades even—to accomplish this feat. Do not allow this to become your reality!

The key is to refrain from scrutinizing your trades once initiated, for it is undoubtedly the paramount action one can undertake to amass wealth as a trader. We swing trade, not day trade. Never forget!

Money matters.

In a recent article by Abe Fuller, he shared insights he would impart to his younger trading self, drawing from his extensive fifteen-year experience. One thing that struck me deeply was his realization of the essentiality of his bankroll for survival in the markets. Many of us trade as if our bankroll is inconsequential, though it may appear evident at first glance. And so, when a fine trade does appear, we find ourselves with scant funds to seize the opportunity.

This point hit me hard in my three months of demo trading. Starting with a $50,000 account made things easier, keeping my bankroll intact. However, it dawned on me that despite possessing a substantial sum of $50,000 for trading purposes, I had the option to amplify the peril if I so desired, thereby risking the possibility of incurring substantial financial losses in a remarkably swift manner. Indeed, the advantages of account size do exist, yet the relevance of its magnitude dissipates if one lacks the knowledge to safeguard their trading capital. Abe always claims that trading well on a small account means trading well on a large account too. Don't fret over a modest account and the inability to trade as desired; focus on the mechanics and the process, and eventually employ the same approach as your account expands or when an investor is found.

Don't trade for the sake of trading.

This lesson struck me hard when I returned to demo trading for a few months. My struggles with live trading stemmed from an incessant urge to be in the market at all times. It felt like a sinful indulgence, something I knew was immoral but brought me pleasure, so I proceeded regardless. Naturally, it felt pleasant until the money slipped away, as is the inescapable fate of most trades pursued for such motives.

After my triumphant foray into demo trading, it dawned on me that my trading activity had been rather sparse, spanning a mere three months. Nevertheless, the limited number of trades I executed during this period proved to be immensely profitable. I traded less, yet I profited more. There is a connection, and I believe that in this case, correlation implies causation!

Patience, the key to wealth, is a virtue not easily attained.

Trading a demo account is easier to endure with patience than trading a live account. This happens because when you trade in a demo, you just don't care as much as when you trade live because there's no actual money at stake. When transitioning from a substantial 50k demo account to a modest real account, individuals experience an undeniable compulsion to swiftly augment the real account's value, enabling them to engage in trading at the grand scale previously enjoyed on the 50k demo. However, this inevitably drives them towards excessive trading, excessive leveraging, and ultimately, the demise of their accounts. Hence, it is wise to commence your demo account with a sum akin to what you shall employ in live trading.

The failure led to triumph.

After countless years of trading failures, I had an epiphany: the reasons for my downfall were within my grasp to rectify. This is how I fixed it.

I meticulously recorded the nuances of my actions as I navigated the realms of my demo account. I felt the market's pulse daily, assessing my emotions. I sensed the surge as I executed trade, the stillness as I observed its course, the very setups I pursued and my astute management of them, and so forth. This was merely a trading journal, and I recommend every trader craft one. Keep it simple; don't complicate things. Simply jot down your musings in a Word file or pen them in a humble notebook. Simply document your trades, thoughts, and emotions daily as you engage with the market in any manner.

I ceased my haste to amass wealth. My triumph in demo trading revealed the root cause of my losses in the real market and, indeed, the common plight of most traders: insatiable haste for monetary gains. Trading is tough. The more you crave and strive for profits, the less likely they become. People excel on demo accounts due to the harmonious dance of their cerebral faculties and the hormonal symphony they conduct, fostering market interaction and conduct that yields profitable outcomes. On live accounts, it's usually the reverse. On a live account, folks hurry to earn, while on a demo account, they view it as a mere 'game,' devoid of monetary stakes.

In truth, after three months of triumph on a demo account, I have gleaned that the key lies in regarding your live trading account as a mere contest, wherein the objective is victory, not monetary gain! Making money is merely a consequence of skillfully playing the game to emerge victorious.

I would have remained oblivious to these profound revelations and incapable of accomplishing any of them. I realize it may appear trite to certain individuals, but it is indeed true. Abe's teachings, though seemingly straightforward and impactful, are rendered arduous by our own imperfections and emotional missteps. If you're struggling with your live account, I recommend returning to a practice account and immersing yourself in Abe's teachings until you experience your own enlightening epiphany.

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