Undertrading vs Overtrading.. your thoughts?

Discussion in 'Trading' started by KCalhoun, Jul 18, 2021.

  1. KCalhoun

    KCalhoun

    I think that many traders, out of a concern for overtrading, tend to undertrade instead. Putting on too much size, too few trades.

    I'd much rather do 10 100-share trades than 1 1000-share trade, for example.

    Worth thinking about... ideas?

    Like poker, you grind. You don't just go all in on perfect hands. You play frequently when it looks like you've got an edge.
     
    Math_Wiz, VPhantom, Peter8519 and 2 others like this.
  2. deaddog

    deaddog

    I know it's a question you will dodge but how's that working out for you? Are you outperforming a buy and hold strategy?

    Too many positions to keep track of. I watched one of your free offerings a while back and noticed that you had missed a couple of entries you had called while you were busy talking about a different stock.

    The more positions you have the closer you're going to get to average.

    I'm opposite in that my trades risk up to 1% of my total account, and yes I do better than the index.
     
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  3. maxinger

    maxinger

    If you have been undertrading, you will most likely continue to undertrade till the end of time
    If you have been overtrading, you will most likely continue to overtrade till the end of time.

    This is due to the subconscious mind which has already been programmed when you were a
    small kid.
     
    murray t turtle and KCalhoun like this.
  4. KCalhoun

    KCalhoun

    I prefer trading small, trading often to minimize risk per trade. My best winning months have been those with many trades.

    Good point re hard to keep track of, especially when markets are volatile
     
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  5. deaddog

    deaddog

    How about your losing weeks/months I guessing you also had many trades.

    When you minimize risk are you also minimizing profit potential. As an educator your goals are probably different than someone who trades for a living.
     
  6. KCalhoun

    KCalhoun

    I'd say my goals are expanded beyond just trading my own account, right. As you said long ago, I trade to teach. So I trade a Lot so that I can test setups to see what works best. Then I write articles and teach based on lessons learned.

    But even if I just traded without teaching I'd still trade small, trade frequently. Good points.

    Like these trades I'm in from last week. Small size, small gains.... I'll scale up if they keep going up. If they go down, small stops. fdly16julya.jpg
     
    Last edited: Jul 18, 2021
  7. tiddlywinks

    tiddlywinks


    I do not agree with your premise.

    You would rather have 10 C-grade trades then 1 A-grade trade?!?!

    perhaps what you need is a "better" filter on your universe of possible trades.



    Again, I don't agree with the premise.

    You are too concerned with money! The value of $1000 at risk in a 100K account is the exact same as $10000 at risk in a million dollar account. A dollar amount at risk is not the only parameter associated with determining risk.

    You take the signals and triggers according to your system/plan. You do not invent on-the-fly, you do not ignore.

    Again, perhaps what you need is a "better" filter on your universe of possible trades.
     
    CarolSciurus likes this.
  8. KCalhoun

    KCalhoun


    I never said 10 c-grade trades vs 1a, more like 10 small a-grade trades. I understand your point re capital.. I trade very specific setups for breakouts and pivots, like my buying UVXY near the 2d pivot low Friday
     
    Math_Wiz likes this.
  9. tiddlywinks

    tiddlywinks


    If they are all A-grade then you would not know when to go all-in.
    If they are all A-grade there would be no concern or question about over or under trading.
     
    KCalhoun likes this.
  10. If a trader is making lots of good trades, he's likely undertrading rather than overtrading,IMV.
     
    #10     Jul 18, 2021
    Handle123 likes this.