Define overtrading

When you’re tired, frustrated and trying desperately to profit, then you’re overtrading.

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Even chasing targets can be pecieved as over trading. Each trade you take should have an RR, try to focus on that rather than I need to make a certain amount of winning trades to hit my target

No, you are not wrong. I guess I got late landing here. I completely agree with you and that’s what it is. A well-built trading plan can help you structure the process of trading and make you more conscious about your trading decisions. Make sure that you indicate the specific instrument that you want to trade, specific time of the trade when you want to trade, and an estimate of the number of gains you want to make and the losses you can take.

As they say, experience is the best teacher. What you did when you started to trade comes nowhere near to what you do now as an experienced trader; be it over trading or not being able to control your emotions.

When your trade is already in loss and still you are placing more losing trade, hoping you will recover all the losses. :slightly_smiling_face: :slightly_smiling_face:

You have given me a new perspective! And I am sure if anyone follows the same mindset, there won’t be anything that can match the happiness that you get when you make a profit. At least, you won’t be more disheartened when you lose.

When is the desperation not there man, that is the very reason I even got into trading!

Ya and in the process making all the wrong moves. But at the same time you know it’s important to keep focus on reaching your targets.

Mind over matter :slight_smile:

Strangely enough, today I had no good currency pairs trades, and I put a very low risk experiment on the FTSE and AUS 200 indices. I expected nothing but two losses, but my entry and exit timings were spot on, resulting in two wins for a $1.10 profit.

A whole dollar win made me ecstatic - okay, I grinned. Seems like my emotional mindset is truly in place, and which embraces my entering more ‘losing’ trades.

keep safe and be lucky…

You are over trading when you stop following the trend and bring your emotional aspect in trading. The attitude ‘just one last trade and I will recover all my losses’, that’s what over trading is and that is where we need to draw a line. Not every day will be a profitable day and we have to sleep with that.

To what all the traders have to say, I would like to add that it is not always losses that make a trader over trade. Sometimes, it is the profits that make a trader become overconfident and over trade. And when such a situation happens, you don’t even realise what you have been doing. I have faced the consequences of trading while I was trading with XTB. I made several profits consecutively and I kept trading. I felt greedy and used 1:500 leverage and made a loss straightaway. It was a few years back that I learnt this important lesson in my life and now, whenever I trade with turnkey forex or any other broker, I ensure that I don’t go beyond my trading plan. And never go near high leverage despite it being available.

Good thing you traded successfully but did you follow any particular strategy for the entry and exit? Emotional trading as far as I know is mere luck. You got lucky to make 2 successful trades from the losing one’s but that won’t be the case each time. Please remember I’m just curious about the strategy you followed here. Might wanna give it a try.

There’s so much anxiety involved in trading isn’t it? It’s so hard to cope with perpetual losses.
It really takes a lot of grit to be a successful trader, not at all an easy thing in my opinion.

Yes, I’m using a semi-naked chart with daily Supply and Demand zones breakout pattens for entry, backed up by EMA 21 & EMA 51 - and both MACD & PSAR for trend strength for exit. You could also add RSI 50 only, as to trend direction. Over 50 = bullish trend and below 50 = bearish trend.

However, this is just the basic pattern, I have my own signal parameters for MACD & PSAR to make them more sensitive for entry and exit.

As for the EMA’s a cross over is a signal of direction change and I only trade above bullish trends or below on bearish trends. My understanding of a trend is to double/triple click the zoom out button on MT4/5 until the overall trend is crystal clear. Same as 200 MA. Any trades taken against the long term trend are intraday retracements - which normally have a short life.

And all this was taken into consideration on my two successful trades - with the probability I would get lucky…

My emotional control is this: I treat every entry trade as being a losing trade and let the market prove me wrong - which is what happened. Most traders treat each trade as being winners until the market proves them wrong. Then they suffer and feel pain, and would do anything to prevent that happening. which leads to revenge trading, overtrading and gambling.

I don’t.

Hope that clarifies my mindset.

I’m starting to think whether it’ll be sane to go with the old adage of a 2:1 RR ratio. Does it really matter to be this safe for successful trading?

Can’t say about others but I really don’t blindly follow any industry recommended ratio, rather I let my trading style determine the ratio. So, what I basically do is to calculate the win percentage and then determine the RR ratio to make a trade pay off successfully.

Don’t just rely on the risk reward ratio to determine the profitability of your trade. Instead, make it work in synergy with the winning percentage and that’s how you can ascertain your trade’s success

One needs to determine a proper exit point and position size. Though even I’m struggling to determine good position sizes for my trade, and I’m basically just doing a bit of hit and trial, I do know that the well calculated PS keeps the trade within the comfortable risk level.

I determine the position size by determining the lots and size of the lot I buy or sell while trading. Basically, the risk can be divided in two parts- the trade risk and the account risk. No matter the market condition, the trade setup, or the strategy you’ll be using, all these elements can give you an ideal position size. This strategy has worked well for me so far having tried and tested it with fxtm and ava trade both.