Overtrading is also the result of improper trade preparation. It’s difficult to overtrade when you begin the day fully prepared. Trade what you see not what you hear or feel during the day. Plan your trades and trade your plan. Prior planning can prevent and severely limit these problems. Overtrading as I see it is the essence of trading frustration. Trying to “catch” a good trade regardless of risk involved is the ultimate in trading suicide. Overtrading will greatly reduce your probability of success because you are trading without a plan.
Archives of “overtrading” tag
rssNegative Trading Behaviors
*Over Trading in Size *Jumping the Gun *Hesitating *Skipping Trades *Being in A Hurry * Trading without Proper Preparation *Getting Stuck in A Losing Trade *Whipsawing *Breaking Your Trading Rules *Shooting From the Hip * Over Interpreting *Discounting *Trading A Scenario without Reference to Price *Trading Heedlessly *Trading Wildly *Abandoning Your Trading Plan *Not having A Trading Plan *Switching Strategies Frequently *Not having A Proven Strategy *Not Pulling the Trigger *Not Believing the Evidence the Market Provides *Blindly Believing A story you tell yourself *Blindly Believing A story somebody else tells you *Becoming Impulsive.*Not Verifying A System Or Method Before you trade it.*Over Researching *Using Trading as a Spectator Sport *Jumping in before you think *Trading too Big *Grabbing Profits too soon.*Getting Careless *Being too Careful *Not adding to A Winning Trade.*Trading Heavier when losing *Forcing trades *Getting Trigger Happy *Gulping Profits too soon *Adding to A losing Trade.*Overtrading in terms of Frequency *Sticking with A Losing system *Sticking with A Broker that gives you bad Fills.*Not Making Trading A Priority*Worrying what others will think.*Trading with borrowed Money.*Trading with Money you need to live on*Holding Unrealistic Expectations.*Engaging in Negative and Destructive Self talk*Becoming Despondent about your trading results.*Wanting certainty before you trade.*Disregarding Probabilities*Fooling Yourself about your Trading.*Not keeping Proper Records*Not Acknowledging Mistakes.*Not Learning from Mistakes.*Repeating Mistakes*Engaging in Self Pity* Blaming Others *Getting Envious of other traders *Giving Up periodically *Resisting loss* Feeling shame for loss *Lying and Covering up results *Becoming pessimistic about the future of your trading * Being Unrealistic about your present trading &Tying self worth to trading * Bragging about Trading * Being Unduly Secretive about trading * Using trading to inflate your ego *Letting trading interfere with A full and Balanced life *Letting life interfere with A Full and Balanced trading *Using trading to avoid living *Doing anything Unethical regarding your trading *Doing what Doesn’t work *Not continuing to do what does work *Getting Reckless & Getting Overcautious * Letting others put your down Re your trading * Waiting to Respect yourself untill you succeed with trading*Being Unorganized in your efforts * Trading for the sake of trading *Letting Distractions take your attention away from trading * Not Specializing *Not executing with precision *Forgetting to cancel stops after a trade is off*Fighting Yourself *Fighting the Market *Fighting Your Methods *Making careless errors & Personifying the Market *Projecting your own feelings on the market.
-Other
Go over each of the Behaviors you have checked and scale them from 1 to 10 as to severity.Let 10 represent the most harmful to your trading.
Risk Management & No Overtrading
Risk management is the most important thing to be well understood.Undertrade, undertrade, undertrade is my second piece of advice.Whatever you think your position ought to be, cut it at least in half. Typical Trading Errors
| 1. Refusing to define a loss. 2. Not getting rid of a losing trade when it is obviously a loser. 3. Getting locked into a bullheaded opinion about market direction. 4. Focusing on monetary value of trade instead of market structure. 5. Revenge trading to recoup a loss. 6. Not reversing a position when the market is clearly changing direction. 7. Not following the rules of your strategy. 8. Planning for a trade and then not taking it. 9. Not acting on your intuition. 10. Giving back recent gains due to overtrading or inconsistency. |
Market Wisdom From Bernard Baruch
You don’t read a lot about Bernard Baruch anymore, but his teachings about the market are useful today as they always have been. There are several good books about him including his own “Baruch: My Own Story” which I recommend highly especially for those of you looking for a book to take with you on your vacations.
Baruch started out as most traders do – i.e. losing lots of money because he lacked the knowledge, experience, & discipline. “You have to lose money in order to better yourself.” (more…)
Characteristics Of A Losing Trader
1. Undiscplined
2. No money management
3. Unprepared
4. Overtrading habits
5. Easily tilted
6. Does not trade with probabilities
7. Trades emotionally without controlling: greed, hope, fear, and euphoria
8. Does not have a trading plan and strategy
Characteristics Of A Losing Trader
1. Undiscplined
2. No money management
3. Unprepared
4. Overtrading habits
5. Easily tilted
6. Does not trade with probabilities
7. Trades emotionally without controlling: greed, hope, fear, and euphoria
8. Does not have a trading plan and strategy
Pull out partial Profits
Pull a portion of winnings out of the market to prevent trading disci-pline from deteriorating into complacency. It is far too easy to rational-ize overtrading and procrastination in liquidating losing trades by say-ing, “It’s only profits.” Profits withdrawn from an account are much more likely to be viewed as real money.
TRADING ERRORS
1. Refusing to define a loss.
2. Not getting rid of a losing trade when it is obviously a loser.
3. Getting locked into a bullheaded opinion about market direction.
4. Focusing on monetary value of trade instead of market structure.
5. Revenge trading to recoup a loss.
6. Not reversing a position when the market is clearly changing direction.
7. Not following the rules of your strategy.
8. Planning for a trade and then not taking it.
9. Not acting on your intuition.
10. Giving back recent gains due to overtrading or inconsistency.
We can learn a lot from the market, and from ourselves, if we would only listen.
Market Wisdom from Bernard Baruch
You don’t read a lot about Bernard Baruchanymore, but his teachings about the market are useful today as they always have been. There are several good books about him including his own“Baruch: My Own Story” which I recommend highly especially for those of you looking for a book to take with you on your summer vacations.
Although I’ve provided several quotes from Bernard Baruch through the years, here are some notes that I’ve taken from reading about him and his market wisdom. Enjoy!
- Baruch started out as most traders do – i.e. losing lots of money because he lacked the knowledge, experience, & discipline. “You have to lose money in order to better yourself.”
- Real success in the market takes time and money. Unfortunately “most people view the market as the place where the miracle of great and quick riches can be performed with little effort.”
- Overtrading and holding too many positions in his early years caused Baruch to go broke many times before he developed the discipline to succeed.
- A successful speculation is “a man who observes the future and acts before it occurs.” Acting swiftly in the market is important.
- After losing money from the recommendation of others, Baruch focused himself on the facts. “One must search through a maze of complex and contradictory details to get to the significant facts…..Then he must be able to operate coldly, clearly, and skillfully on the basis of those facts.” The challenge for the successful speculator is “how to disentangle the cold hard facts from the rather warm feelings of the people dealing with the facts.” Moreover, “if you get all the facts, your judgment can be right; if you don’t get all the facts, it can’t be right.” (more…)