Is the term overtrading too loosely used?
I mean if you are on a winning streak for the day week or month and trade opportunities arise according to ones own rules and strategy surely they must be taken even if your set targets for the session day etc are already reached. (is that still over trading)?
I guess over trading becomes a bad thing when your on the loosing end and you fail to retire and take a break from the markets for some hrs days or weeks etc. And instead continue to take a beating.
Overtrading can be a confusing term.
As long as you are using proper money management, you are not overtrading even if you have 10 to 20 trades in your account. As long as you are trading within your portfolio risk percentages, meaning using good risk management, everything should be okay. Your trade numbers depends on your BUDGET.
I think overtrading tends to refer to a situation where trading gets out of control and one is ignoring one’s own trading strategy rules. This can often arise in choppy, directionless markets where, for example, the price can swing immediately into the other direction as soon as the trade is entered, so the trade is reversed…and the market reverses again, and so on. Or we jump out with 5 pips profit, and then jump in again for another 3 pips, then again for an 8 pip loss and so on. Then when we look back at the end of the day we would have been much better off just sitting with that first trade of the day…
Depending on your trading strategy! But a definite NO from me, the term overtrading is not used too loosely. I am guilty of that all the time, and guess what it does to profits! and as Manxx said - you did almost answer your own question. But like I said I think it is entirely strategy dependent.
On an intraday trading scheme -you are riding a nice trend up and up and up - - well price has exhausted itself reached 120% of its ADR. so your next UP - is a loser - maybe ?
Over trading indicates lack of patients and discipline to stay with your trading plan
You could also look at it like a professional Black Jack player, he will bet the table minimum until the card count is in his favor then put down the big money, you can’t do that without patients and discipline
Spot on. Folks earlier talked about over-trading in terms of trading too frequently. I would suggest over-trading can also be thought of in terms of trading too big (too much leverage). Both speak to a failure to follow one’s trading plan.
Thanks for your input.
It is how I suspected as feedback has shown here,
As long as I stick religiously to Planning a trade and trading my plans I think I will get there.
Thanks again