What is Overtrading & What Causes It? -From how I understand it, overtrading is when the potential loss of our trade(s) would be larger than a prudent loss % of the trading capital -What causes overtrading: greed and lack of a proven successful trading plan
Overtrading: Trading with scared money Trading in the market condition you are not comfortable with Trading in excess of your daily stop loss Not waiting for your setup Causes of Overtrading: Lack of Compartmentalization Ego Lack of humility A string of losses (can lead to lack of confident in setup) A string of winners (can lead to overconfident in setup) Outside events like bills and to please family and or friends Greed Fear
Good Morning nikokalo75, There is no such thing as OverTrading. Overtading is trading industry marketing term developed by the Trading Businessman who sell trading products to wanna-be traders who have low education on trading who trying to make $1 million in a year to retire from work or make losses of years of losing money. Overtrading is an excuse word for not making money trading. It used by trading sellers to give the trader that invested in their book or trading education as an excuse when you tell them you are losing money. We are all adults, the market is open 23 hours a day, trade as much as you want to , however you want to. Also, overtrading is a GOOD thing, because the more you think you can make money on a trade and take the trade, the more fast money you make and quicker you reach million dollars or whatever your money goals is from trading. There is only one word we to know in trading, and that word is Win. It's all best guess anyway when discretionary/guessing manually trading.
%% WELL JS may have used 5 to profit; but wonder why one of Chicago exchange managers said ''innovation deserves more than 15 minutes of fame??'' He-exchange would make much more in comissions\bid ask if all used 5 minutes. But since you noted ''a whole day'' Don Bright Daytrading Co did not like 5 minutes = too long/ which i thought was funny
For a day trader I would say over trading is often linked to time of day. First and last 1.5 hrs of the session generally have the most movement and should be the best time to day trade. But people are often hesitant the first 1.5 hours and intimidated by the movement at this time. When things have slowed their confidence returns and they place a trade generally copying something they have seen from the first 1.5 hrs. In this instance 3 trades in the first hour may be perfectly fine, but the single trade taken in a range bound market during the middle of lunch is an example of overtrading. Figure out when your system/style is most compatible with the market range and trade then. Not when you feel comfortable.