Generally speaking, everyone in their trading career has been burned at least once. Right? It seems that there are few people who have not lost everything from start to finish.
Burning is a deep pain for all traders who are reading this article and have not. Burning an account is ultimately due to some error. It could be because of wanting to get rich so you go all in to try your luck, or lack of knowledge about capital management, blah blah blah.
People often say prevention is better than cure. I wholeheartedly support this point of view. But now that it has burned down, how can I start trading again?
1. Start over
Before trading from the beginning, learn from the beginning. Just pretend you know nothing about trading, put yourself in the position of a super newbie, naive, innocent, not even knowing what color a candle is.
Review your lessons from the basics, temporarily forget the old knowledge. Because the failure you just experienced proves that you have a big gap in your knowledge.
2. Understand strengths and weaknesses
Although the recent blow took a lot of money from your account, it also left some valuable lessons. One of those lessons is your strengths and weaknesses in trading.
Every trader has strengths and weaknesses. The problem is that you need to exploit your strengths and minimize your weaknesses. The mistake you just made may be that you are not trading with your true ability.
Take an easy-to-understand example: You are suitable for long-term trend-following strategies, but recently you have been trading reversal scalps.
A fish cannot climb a tree, it must swim in the river.
3. Make a new diary
Write a brand new trading journal. But don’t throw away your old journal out of frustration or bad luck. Keep both of them with you.
The new book is a place to start over. The old book is a treasure trove of lessons to reflect on.
After a period of trading, take out these two diaries and compare them to check how much progress you have made after that painful burn.
Happy Trading!
