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.
I believe in this proverb: Excess to anything is bad. I found this appropriate in my trading journey as this helped me to give attention to each aspect of life and teach us how to manage things. Each individual has a particular stress level and a trader can invite pitfalls in his life if he over trades. New traders generally try to devote more time which is good but as you are moving forward with your trading experience you must try to master the timing in the stock market. Trading in forex can give you profits and losses, it all depends upon your goals and time in which you want to achieve. So to balance your trading life, you have to impose limits and to have that discipline which helps you to remain in those limits. Limits are not as such to give a break for a few days from trading but you can shorten the trading time and can use the rest time to do other things that you enjoy. Ultimately trading is not everyone’s piece of cake. It's the source for your income. Carefully invest your precious time.
Duktilar posted: Well, they said, indeed, there should not be an excess of k, because we must give ourselves certain boundaries both in time and in trade, and thus we can control everything more clearly.
True, setting those limits is very important while we trade. It sort of keeps the work more managed and settled.
Among all the bad habits, over-trading can be very costly for a trader. There’s this general assumption that the more you trade, the more chances you have to make profits. Sadly, it is often ignored that winning is never guaranteed and it’s possible that the majority of your trades can go wrong. The best is to not take unnecessary trades if you are not sure about them. Sometimes traders make more profits from a single trade than they collectively make through ten trades.
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