The Real Dilemma in Trading
Which is More Important, Quantity or Quality?
Taking More Trades
Recently, I had a pleasant email from a trader with a question. (I always reply to nice emails, it’s the self-entitled demanding ones I file in junk!)
This trader asked the question: (I’m paraphrasing)
“Mark, I trade this strategy, but I’m not getting enough trades. I want more trades to make more money, what should I do?”
There are a few reasons you might want to trade more frequently.
#1 To get more market experience
#2 To make more money
#3 You enjoy trading and want to do more
Let's Unpack
#1 Is good, there’s always a challenge with overtrading vs gaining screentime.
On one hand, you know that trading less is the key, but on the other, you can’t beat screen time. Trading more frequently with small size is a good middle ground. Get the experience with skin in the game, but don’t do any damage to your account…
#2 Dodgy one this, I’m afraid.
Unless you have a real edge that appears regularly (unlikely) and you just aren’t taking advantage of it, then you have to be careful with this narrative. Less is always more, for nearly every trader being more selective about your trades is better.
#3 Valid to some extent.
We should all enjoy trading, none of this trading like a robot nonsense! But we do need to be careful if we’re trading just for enjoyment. That’s a slippery slope to overtrading. Enjoy the execution aspect of trading, but learn to enjoy the preparation, the study, and the homework. Then you can love the whole process and aren’t getting sucked into risking capital just for ‘fun’ (No pro trader risks capital for fun!)
So, going back to this trader’s question.
If he wants to trade more frequently to ‘make more money’, I’d advise extreme caution.
If he wants to get more experience, cool. Trade very small.
If he is getting a dopamine hit from executing trades, caution again. That’s one step into trading with no edge.
Dam this trading business is a funny one!
Find your groove, test what works for you, try and align with best practices, and learn as you go.