Over trading is a bad habit

Over trading is one of the reasons why people make their account zero. If any trade goes against they open new trade thinking that it will help then to recover the loss quickly. By these way they do over trading. It is a really bad practice.

😎 I very much agree with you, I was a victim of over trading, I end up losing my win trades.

@UweMoench thank you

Indeed it is, especially when one is on a winning or losing streak. When one is on a winning streak, one overtrades because of overconfidence. When one is on a losing, one overtrades because of the desire to win.

Over-trading is very harmful. It is never possible to become a successful trader by over-trading.

i agree with you on this, over trading is bad and one needs to make sure not to lose what is left after they have already incurred the losses.

It is not possible to sustain the investment by over-trading. Every trader should refrain from over-trading.

If you can’t control your emotions, you will end up overtrading. So, it is always advised not to let your emotions control your trades.

debragonzalez posted:
If you can’t control your emotions, you will end up overtrading. So, it is always advised not to let your emotions control your trades.

Well said! I think the best way put to avoid over trading, is to use a trading plan. That will surely be of some help.

Overtrading happens when you are getting over confident or not being satisfied with win/losses and yes, everyone should avoid the over trading as nothing good comes out of that.

Everything should have its own measure, and if you want to really be successful, you must be able to calculate and plan.

There is a moment when my fanatical start to trade, but this is wrong, because reaction and attentiveness are lost.

No way to ignore your point; but the fact is; you also need a healthy trading capital to be a satisfied Forex trader!

Yes, I agree with you. Trading CFD is risky and should be done carefully.

Gracewilson1995 posted:
Yes, I agree with you. Trading CFD is risky and should be done carefully.

There is on gain without risk. So, manage or reduce risk effectively to earn money.

It definitely is. When I had just begun with trading, over- trading was one of the major issues that I had faced at that time, but yea with good regular practice and planning, one can fight it.

Be aware of over trading, the eagerness of trading beyond the limit can cause a huge loss. Sometimes, traders do over trade to cover previous losses, it confuses the trader with frustration and leads to loss of their whole capital.

Definitely agree plus chasing loses is always a bad habit

I think it may be a good idea to define what 'overtrading' actually is.

Investopedia has a general definition of overtrading which says: 'An individual trader...will have rules about how much risk they can take, including how many trades are appropriate for them to make.Once they have reached this limit, to continue trading is to do so unsoundly. While such behaviour may be bad for the trader...it is not regulated in any way by outside entities.'

The problem is that 'overtrading' means different things to different people and defining it starts with knowing yourself and deciding what your 'level of pain' is for each trade and for your account drawdown. Once you establish that, you must always stick to those limits in your trading, or else you will be 'overtrading'.

Myfxbook has helpful tools like the 'Risk of Ruin' graphic for your account that can assist you to choose those levels.
Your MT4 terminal also has a tab called 'Exposure' which shows you your account's exposure to each currency from the aggregate of all your open trades.

It seems like many of the posters on this thread are talking more about initiating trades due to emotional impulses - so called 'revenge-trading' (where one loses a trade and then tries to 'get revenge' on the market by initiating more trades) and the like.

The disciplined trader, like in the Investopedia definition above, may also unintentionally overtrade his (or her) account by not paying proper attention to the available margin on the account as he trades.

Not only should one define how much risk one is willing to take on each trade by using a hard stop loss (can be placed either in the market or on your trade plan, but MUST be triggered if the market gets to it) every time, but be careful that one does not start trading on the accumulated equity of trades that are in positive territory but not yet closed out. I have seen trades that were up by a wide margin come back and stop me out, and if I had been trading with that equity as if it were actual 'money in the bank' it would possibly have triggered a margin call cascade and a large loss.

My point is the 'available margin' number on the account may lull the trader into a false sense of security and cause overtrading of the account even when trades are going the right way.

EQUITY MANAGEMENT is the antidote to overtrading as well as the key to long-term success.

Happy trading!