Analyse Trading
Available on Google Play
Install

Overtrading

Overtrading means taking too many positions, or positions that are too big, outside what your plan allows.

It takes two forms: too many trades, out of boredom, excitement or the urge to recover a loss; or too much exposure, with sizes that break your rules.

Every extra trade costs spread and commission, and off-plan trades usually have negative expectancy. Overtrading can therefore turn a decent strategy into a losing result.

To spot it, compare the number of trades taken with the number of valid setups in your journal. If you take three times as many positions as your method generates, the problem is not the strategy, it is the execution. Set a maximum number of trades per day.

The full lessonEmotions and discipline: FOMO, revenge trading, fear and euphoriaFOMO, revenge trading, fear and euphoria: spot the emotions that sabotage your trades and build a checklist, mandatory breaks and a daily loss limit.← Full glossary