Burning Out only makes you stronger,
LOL, to get margin called again, and again?
The best way that I found for to avoid overtrading is to write on paper how much money you want to earn or willing to lose in a one week period of trading and the amount of hours per day you’re willing to spend in it. Discipline yourself and make it a rule to stop trading when you reach either point.
The benefits are two-fold.
It prevents you from taking revenge on the market and rewards you if you did win. So if you reach your goal in 2 days, be willing to stay out of the market until the following week and start all over again. You’ll find a better approach with a fresh start and continuing education. I hope this helps as it has helped me to separate my personal life from my Trading life, which when not in control can take over your life without you realizing it, until you see your partner walk out of your life due to a lack of attention from you.
Developing a proper trading plan is not difficult to do, for avoiding over trading. Eliminating over trading is all about having a plan to keep your emotions in check.
I think you have already received plenty of good advice about your question so I thought I’d take a slight offshoot from the same issue. I.e. not so much how to avoid this, but when [I]should [/I]one increase the lot size.
Of course, it is not wise to increase lot size simply because you had a win on the last trade. But, if I understand correctly, you are a relatively new trader and therefore probably trading micro lots at the moment. Naturally, you are hoping to succeed in the future and will inevitably wish to increase your position sizes accordingly - the question is when…
This is why you need a stable trading plan combined with a sensible money/risk management method. You can then consider staying with your present small lot size until your trading plan proves itself and you are making consistent profits over a chosen time period. Once you are confident that your trading plan works then you can decide to increase your position size in line with achieving preset equity growth levels.
E.g. if your trading produces, say, USD 300 after x trades then slightly increase your lot size. If you continue to make profits then repeat. If you seem to be losing then drop back to your previous lot size and review your trading plan - etc. This is only a very simple and purely illustrative example of a way of thinking about this. The main point being to take your focus away from just your last trade and direct it towards a broader, longer-term analysis of your overall progress towards being a more significant trader.
when you plan before trading you can avoid many things that are not good as over trading , multiple trading and emotional trading etc. After getting your target you set before you should not trade again . Over trading can e dangerous any time.
Trader should not ignore the planning factor as it is much important, those who keeps proper trading management does not over trade and eventually take profits.
Yes plan tradjng this is imnportant to manage our risk and also account wsiely, on daily trading will good if we have limit risk on daily based if already hit stop loss hence we must waiting next day opportrunity, still many chances to makng profit again
Hello
Remember that the result of 1 single trade doesn’t mean anything. If you have a winner, that doesn’t mean the next one will be also a winner.
Just don’t make trading decisions from the result of 1 trade. If you want to increase your lot size, wait for 100 trades for example. If you are profitable, then put more money in the next trade.
Also, to avoid overtrading, review your trading method. If your method gives you trades that occur frequantly, the risk of overtrading is high. What about modifying your system so it gives you 2-3 trades per week? Or change your timeframe. If you trade de M15 chart you will have more overtrading risk than trading D1 charts.
But I think your problem is making decisions from the result of 1 single trade. Believe me, a single trade doesn’t mean anything to your trading plan, it’s just another trade, there’s no guarantee that the next trade will be also profitable.
I hope this will resonate in you.
You should have a plan before place an order. follow your own plan and strategy.
Discipline is one of the most important thing in trading forex since forex doesnt work the way you think.
you manage your profit, you manage your lose as well.
Nice idea to have a trading plan , with plan trader will trade in limits he will not do emotional trading or over trading. when you will get your target in trading do not do trading again and again. I like to quite trading afer some trades because over trading can confuse us .
Dont go under 400 percent margin with 50 percent blowout
Whenever we are doing our trades we should know that what is our trading plan and how we are going to meet our trading targets. This is also important if we are looking for more profits.
Why to avoid trade…? I don’t think that it would be a wise decision to avoid trade in order to grab each and every opportunities which came across you.
We don’t need abvoid trade but we need to manage the risk, and tis required high intention to keep discipine with risk management plan and also money management plan, pay aattention with the risk before imagine easy earning, built up mindset if this is not easy way to get rich at short time
This overconfidence is dangerous and you should avoid to over trading, I would like to suggest you that you should trade with proper profit target, when you achieve that target then you should close your trade on that day.
In order to avoid the over trading you will have to trade with proper management and planning, you should close your trade after achieving your profit target, never take the unnecessary decision, except the small profit then you will be able to avoid the over trade.
First of all I want to draw the attention towards the fact that over trading is psychological as it is due to the urge to make more in short timeframe.
However, here are few tips you can try to avoid over trading.
- Don’t get emotional when you suffer a big loss, take a break and trade with cool mind.
- For day traders, it is necessary that they must determine the number of trades to put per day.
- Trading all day to earn more is not right perspective; one should always take breaks in between.
- One needs to execute its trading plan step-by-step and always set stop loss and targets for your trade so that there is no scope for overtrading.
The outcome of a certain trade has nothing to do with the outcome of the next trade. So basically it all comes down to discipline and control. We are often tempted to increase the volume of a profitable trade but as we all know the market changes within a blink of an eye so we can easily lose if we don’t resist that temptation. If you have a strategy stock to it, don’t change it within the last minute, try not to get too emotional or over excited. If you have any targets which are reached, close the trades and take a break for the rest of the day/night. Better be safe than sorry.
This. You have those easy days, and you have those hard days. Take the easy ones when you can, because those hard ones can strike anytime.
Sometimes, its looking like, " Count your lucky stars" that you profited, and call it a day.
If your system calls for the signal, trade it as per your system. But when you hit your goal or target for the day, and hey, maybe for the week. Wrap it up, call it a day.
And, it can be hard to do. This is when self control comes in, and you have to just let it go, lol… Enjoy the day, find something else to do.
Overtrading = Squeezing trades not on par with your system,
Overtrading = Daily goals accomplished but continue to look for trades.
Overtrading = Trading just to kill time.