Overtrading is the one of the “Os” in our lesson, The 5 Deadly O’s of Trading: What Traders Do To Guarantee Their Own Failure.
1 Like
I absolutely agree, as long as you take every trade that your system or your strategy, or your plan gives, it’s not wrong. It doesn’t matter whether you take 10 or 50 trades, as long as it’s your plan or your system that gives the signal to enter
It’s quite simple. Overtrading is a lack of emotional control, that is brought about, in the main, by pain of losing, or a Fear of Missing out (FOMO).
Which is what 90% of traders do when they expect/hope that their trades are winners until the market proves them wrong.
I’m not immune to these emotional reactions, but I’ve learnt not to follow the herd. How I now manage my trades is a mindset that every one of my trades is a loser until the market proves me wrong.
Which is a complete reversal, and a better emotional control scenario, because I suffer my pain at the outset of every trade, not at the result.
Crazy, really…but it works.
I think the trader knows that he is overtrading but can’t help it as the desire to earn more is not stopping him from overtrading.
Can this desire be controlled? If I consider myself a beginner and I know nothing about the market, then how is this possible that I would be knowing how to act when I am going for a trade?
1 Like
So any deviation from the plan is a big risk then, per se overtrading
Honestly it does sound oddball crazy.
And even more so because it is so simple on the outset.
maybe so ,there is extremes like trying to recover losses quickly or addictive behaviour .I traded more when i first started, I might wait days for a set up now without no trade open. as oppose to when i first started so its relative .
Agree, almost 5 of them had been go through by demo account. Lucky is demo account 
That’s why it is advised to study about the market and trading before stepping in it.
I’m surprised nobody else has said this. Maybe it’s because I’m wrong. But I thought overtrading is simply taking on more risk than your trading plan allows. As for how or why that happens, well, that could be a variety of things. But I’d agree with Steve369 I that it has its roots in a lack of emotional control.
1 Like
Lol Or as Master Yoda would say, “Try not! Do, or do not. There is no try.”
1 Like
The better way to know this would be to prepare your mind that there will be situations in which you might face loss but you have to still act calmly in order to avoid overtrading.
If all those trades were 100% according to your rules ( or at least what is profitable for you ) then that is not overtrading. As long as everthing is inside the span of your plan.
However if it gives you more loss than proft, then it is overtrading or your strategy is not profitable.
If you are just moving yolo outside your plan, risk management, etc. than it can be overtrading or plain gambling lol.
Not every but almost. And this is not true. The ones who invest their time in practicing and learning trading more do not indulge in overtrading. And this is the actual way how a person should have their foundation in trading.
That’s more like not sticking to your risk management plan.
You have a great point! As long as the trader is following their trading plan, they are not overtrading. But if you make losses and your anger or fear make you risk more money, it is overtrading. You won’t realise that you have been overtrading until you make over-losses.
1 Like
That is the dangerous part with overtrading…You will not know, until you see your results…As a beginner just take it very easy and test things out. Write down exactly why you took a trade and how you felt at that moment. This way you can observe yourself on the technical and emotional part of trading. The better you become, the more confidence you will get and the more you MIGHT be able to trade. If you trade once a day or once a week and you are profitable, that actually can already be good enough.
As simple as that! If a trader does not want to be caught in the web, they got to refrain from trading all day and take time off after a serious loss.
And remember that it is not their full-time job and their focus must be on staying consistently successful than overtrade and lose many times.
We have to establish the control while doing our trading so that we will know when it is safe for us to do our trades.