How to get back into trading after a Break – Part 1

07 Aug
How to get back into trading after a Break

How to get back into trading after a Break – Part 1

I’ve just come back from my wedding and three week honey-moon in a remote island called Ithaca in Greece.

What I love about this tiny island is that, there are traditional Greek taverns, food, with picturesque beaches and views which we only see in paintings.

With the limited internet access, during the time I haven’t been able to trade the markets at all.

If you’re about to go on vacation or you’ve just returned, getting back into trading can be quite a challenge.

Today, I’m going to share with you my tips I use to get back into trading after a long holiday.

Step #1: Catch up with the main market

Start with the main index.

If your watch list includes the top 30 stocks listed on the JSE, then you’ll need to first open the JSE All Share 40 index chart (ALSI).

On your Meta Trader 4 platform, you’ll see the ALSI as ‘SA40Fut.a’.

You’ll then look at the price-action of the chart to see how it moved while you were away.

Jot down and identify the market environments the ALSI endured and then ask yourself this crucial question.

“What trading environment is the ALSI currently in and which direction is it more likely to head from here?”

There are only three trading environments the market can move.

  1. Bull market – The ALSI is in an uptrend
  2. Bear market – The ALSI is in a downtrend
  3. Sideways market – The ALSI is in a sideways trend

Let’s see all three scenarios so you know what to look out for next time.

The Bull Market

Bull market

From 23 June 2016 up until 1 December 2017, was the last time the ALSI was in a Bull market showing higher lows and with a strong uptrend.

The ALSI then broke below into…

The Bear Market

Bear market

From 1 December 2017 until 24 April 2018, the JSE then went through a Bear Market showing  lower highs and with the strong downtrend.

The market then broke above the downtrend entering into a congestion period also known as…

The Sideways Market

Sideways market

Since March 2018 up ‘till today, the ALSI has been in a sideways market.

Side note:Luckily, I went away when I did. As a breakout trader, I only trade in the direction of the break-out. So when the ALSI breaks out of the sideways market, that’s when I can expect to get fully back into trading.

It is crucial see how the main index moved while you were away. This way you can catch up to what you can expect to trade in the near future.

Tune in to the next BlackStone Futuresarticle for part 2 of “How to get back into trading after a well-deserved break”

“Wisdom yields Wealth”

Timon Rossolimos
Analyst, BlackStone Futures

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