Overtrading

Does anyone have any methods or ideas to keep from overtrading? About once every two weeks I trade ten times the amount I should, and there all bad setup's. Then I will trade good for a few weeks then BAM, I get out of control and blowup. Any thought welcome.


White

 

Handcuffing both hands to the chair might work.

 

you should look at the type of market that makes you overtrade, and either avoid those days or come up with a more disciplined approach.

 

<i>I get out of control and blowup</i>

I imagine you lose a lot of money on these days? If you were trading someone else's money, they would put a daily loss limit on your trading. IMHO, this is the most important rule of all. When you approach the limit, and then hit it, the pressure is off. You get out, and for the rest of the day you don't have to worry about making any more bad trades.

 

but handcuffs would work too...

 

not sure if your trading stocks or futures ...

I trade futures and the broker has a daily loss limit set in the software.

It helps limit losses when my discipline breaks down ,similar to you every 2 weeks or so.

Still wish I could conquer mastering my emotions when I get off track.

 

Thug life

Yes, I do lose a lot on those days. I think that's the answer, set a limit and stop trading. I have a feeling that's easier said than done.



Monee

I trade stocks, the same three everyday.

 

White, the thing that keeps me from overtrading or taking trades that are not set up properly is my trading plan. You must have strict rules that you follow to enter a trade. I keep my entry and exit rules next to my computer and review them from time to time to make sure I do not take a trade unless there is a proper set up.

If you don't keep a trading journal, you should. By going back and reviewing your trades, you will be able to identify when you are overtrading or taking trades that are not set up well. By continually reviewing your mistakes you will learn to eliminate your mistakes.

Also, as was mentioned in previous posts, you should probably have a limit on your maximum loss for a day. If you hit that limit, quit trading for the day.

 

"I have a feeling that's easier said than done. "

Amen! You must set a loss limit and stick to it. It should be the size of what you would make on a fair day. You cannot let your bad days outsize your good ones or your probably doomed.

 

When I was young and stupid trader (no longer the former only the latter ) I used to overtrade after a few setups go badly wrong and I lose so much money that I stop caring about any further potential losses.

That is a very dangerous state of mind because that lack of care removes the fear of losing but it does not improve the sharpness of mind. To the contrary!

The following trades are normally taken not because of the valid setups but because the senses are too dull to recognise the danger you are in.

Only when my account took severe beating I realised that certain changes needed to take place.

Also the love of the game and the desire to remain in it made me take a step back and take impartial look at myself.

That was the beginning…