Do not overtrade because overtrading is possibly the most significant and most recurring trap
a trader will face, and it needs to get addressed personally
by every trader.
I have some components hardwired into my system
which operate to do not overtrade, and I would prefer to mention that
are critical, and crucial aspects of my profitability.
As you are (I assume) yet to see the specifics of my not overtrade trading system, I can suggest a quick fix if you are a trend trader.
Most trading mentors/educators will advocate trading larger time frames, but I am too impatient to want to trade daily timeframes all the time so that I will suggest a couple of other options.
The first suggestion I am going to give you is to take 10 minutes or so off after every position you close. Use the time to reset and to move back in a calm and relaxed mindset.
Also, another suggestion specifically for trend traders is to use a tool that finds the best current trends available in your chosen timeframes and markets and only trade those markets.
My favorite tool for locating the strongest current trends
in any timeframe in any forex market is Forex Trendy.
As mentioned elsewhere in this document, Forex Trendy
sometimes becomes effective, affordable, is always up to date and for the price of a couple of coffee‟s a month is a no-brainer
for any trend trader wanting to reduce the time he spends
analyzing the markets and finding trades.
The comparable amount of time I save now that used to
be spent looking for trades and analyzing trends is
ridiculous. I am just surprised Forex Trendy isn´t more
If you are going to try those suggestions but still find you are having
trouble to do not overtrade, then you need to do a deep dive into
what we can see under the surface of your trading methodology and mindset.
My view is that solid discipline
and effective methodologies are the antidote to
overtrading, so if you aren’t making headway on the
problem, you need to address the fact you are most likely
addicted to trading, and your greatest motivation is
probably not making money – it is something else.
The over trade ugly truth
How can I avoid the risk of overtrading, of making this, the most obvious and damaging mistake of trading? It’s very simple! Study! Read, follow webinars, practice with a demo account. Do what is necessary. If you do not have time, look for your time! You never know when you will have a moment of revelation or how many of these moments you will need to be consistently profitable.
Over trade is manageable
Starting the day with a substantial loss in Forex can cause even more experienced traders to over trade. In my Forex account, the worst feeling I can have is to look at my previously open trades and find a loss of – 750 dollars in bright red numbers. I have to fight against the urge to try to recover the money as quickly as possible — an almost universal impulse among small traders. We must avoid the temptation to make new operations driven by a feeling of revenge, which can even generate more significant losses.
Finally, it is common for a trader to have a day when he is not emotionally prepared. When such a thing happens, the results can be disastrous. When a person is not “emotionally prepared,” the person tends to throw the trading plan out the window and open untenable, disorganized and poorly analyzed positions from the technical point of view.
As you can see, many forex problems are rooted in a lack of emotional control. Overtrading or the over trade included. Therefore, even if it sounds redundant, learning to control our emotions is critical to succeed in forex trading.