One of the many common pitfalls of trading, is falling into a “rut” or “funk”. This is a period of time where things generally aren’t going well. It can manifest in many ways, not exclusively through a period of drawdown. Maybe you’ve lost the enthusiasm for trading that you used to have. Maybe you feel like you have no idea what you’re looking at anymore when you sit at your charts before the open. Or you find yourself searching for that “Holy Grail” indicator again, even though you know it doesn’t exist. Or you could just be all-around grumpy lately, with no obvious understanding of why.

Welcome, to the funk. Embrace it, for it is unavoidable. But thankfully there are a variety of things you can do, to reduce the symptoms and manage yourself out of it. The first and probably most obvious of which is, just take a break.

Trading is stressful, possibly more stressful, in more ways, than any other profession (a topic I’ve written about before…). It will stress you in more ways than anything else, and especially in ways you don’t physically see. Your nervous system can absolutely get fried from the sheer amount of stress trading puts it under, and at times it desperately just needs a rest. So take a day off. Or take a few days off. And if you find yourself balking at this because of all the trades you’ll miss out on… you might want to take a close look at why you’re trading in the first place. You might have some motives that aren’t entirely healthy.

An alternative approach could be seen in a way as the exact opposite of the suggestion I just gave. Do more in the markets. But not just more of the same. Make a list of all the stuff you “don’t do” in the markets, and do that! As an example, for some time now I’ve considered myself exclusively a “structural” trader. I trade two very rigidly defined setups, in the first 90 minutes of RTH, and that’s it. Nothing else. I don’t scalp. I don’t trade NQ. I don’t trade overnight. I do my carefully defined job, and I shut it down. Period. No exceptions.

But a few weeks ago, I found myself in something of a funk. It was of the generalized variety, I didn’t have a specific event to point to, it was just an overall unhappiness with what I was doing, where I was going, etc. I didn’t even really recognize it for a while. But once I did, I decided I needed to shake things up. I wasn’t feeling like just taking a break was the answer I needed, as when I returned I would just be back where I was. So I thought about all the stuff I “don’t do” in trading, and did every single one of them. I grabbed a fresh evaluation account on a big sale from LeeLoo Trader Funding, and decided I was going to use it specifically to scalp. NQ. At night. 😱 Every one of the things I had decided that I “don’t do”.

I can’t tell you how liberating this was. And it’s not even about the P&L results at all, which honestly weren’t all that good. But it put me in a different place mentally. I didn’t know what to expect (or what I thought I should expect). I was fading ranges – something I never normally do in my morning setups. I was reading pure order flow since there’s not really any structure to fall back on overnight. I was being patient, as trading range extremes requires you wait for price to reach the extreme. And possibly above all, it was fun! Again even though my performance wasn’t that great (why should I expect it to be anyway, doing something so foreign?), it was just refreshing, a change of environment so to speak. I did this for about 2-3 weeks when I decided that I needed to refocus on my RTH trading, and this exercise helped bring me back into a place of objectivity about my trading, about my results, about why I’m even doing this in the first place.

I’m now back to only trading RTH, but with a renewed focus on process, and risk management. I’ve got a newly funded account at LeeLoo and am “baby-stepping” my way towards profitability there, just a few ticks at a time. My expectations have been recalibrated, and I’m no longer feeling the generally crappy way I felt a month ago.

So if you feel like you need to change something, rather than adding more indicators or changing timeframes or throwing away your process (assuming you have one!) and starting over, try just doing something totally different for a little while, without placing any expectations on yourself. You might find it’s just the mental reset you needed, while still keeping you “in the markets”.

Until next time, good trading!

Jonathan van Clute
Community Manager, Trading Research Group