What is Overtrading? How to persuade if you are Overtrading?

What is overtrading?

The common criteria in trading are that most of the traders fail. It is estimated that 96 percent of traders lose in market and makes a full stop for trading. This is due to overtrading. It refers to surplus buying and selling of currencies by a trader or broker.

What is emotional trading?

How to persuade if you are overtrading?

First , before entering a trade do you frame a strategy ? If yes, do you follow it strictly? It’s very occasional to get good opportunities for trading. It occurs only once or twice in a week, so kindly grab it in time.  If you are taking trades every day and looking for more than approximately 20 pips of profit, you are certainly overtrading.  

Now, next we have to check your entry strategy of trade. The time frame of the strategy will also make you to lose money and most brokers will encourage these kinds of strategies.  So, you have to back test the strategy with many numbers of trades and analyse the results. The more you forecast you will have clarity in choosing a trade.

Finally, you have to be selective for entering a trade. Successful traders must know how to stand aside and do nothing when the market is not giving any opportunities. There are many traders who have the skill to make money, who are taking the good trades, but who fritter their winnings away because they are unable to stand aside when the market is not providing good opportunities.

What are the common mistakes done by a trader?

How to avoid overtrading?

You need to have a very clear and strict method for finding trade entries and stick to it. You need to back test your method and make sure it has been profitable over a long period of time and keep faith with it. When there is no such opportunity, leave it as such that the day not belongs to you.

Happy Trading!!!

What is market analysis?