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LESSON: Overtrading – The Number 1 Account Killer in the World!

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[op_liveeditor_element data-style=””][text_block style=”style_1.png” align=”left” font_size=”16″ font_font=”Montserrat” font_color=”%237e7e7e”]Over-trading is a very common mistake among new traders as they can be doing it, and not even know they are. It is impossible to put into a number value what over trading is.

If you are taking setups every day, I can assure you that you are over-trading. The best setups and the trades we want to be taking occur roughly 3-6 times a month on the daily charts.

Obviously if you are trading smaller intraday time frames, then you can find more setups.

The psychological problem many Traders face is they are under the illusion that the more trades they place the more winning trades they will have. It is in fact the complete opposite. The less they trade the more winning trades they will have and the less the losing trades will take profit away from the winners.

Less is definitely more in Forex trading

You can go long winning streaks on the daily charts and the simple reason for this is, if you cherry pick and are selective with your trades, you will get plenty of chances come your way.

However;

If you find yourself unable to stop making trades you have a serious problem and I would highly suggest you take some time away from trading. I often find myself when discussing this issue with students who have either had account drawdown or are in a rut, or have made nice account profits, but are looking for something new and new fresh ideas to create that next breakthrough – take a break.

Sometimes you don’t know you are over-trading. Who knows they are over-trading right until they learn right?

Keep this in mind; when you make a loss is it your first reaction to make another trade straight away? Are you looking to chase back that loss? As soon as the daily New York candle closes do you HAVE to find a trade? or, do you trade what the market gives up?

Here is the final question; Are you trading more on logic or emotion? For example, if you made a loss now, would you go to bed and come back, or begin the hunt right away for the next trade?[/text_block][/op_liveeditor_element]