Trading Discipline:
Overcoming the Threat of Overtrading
Enhancing Your Trading Discipline and Focus
What is the overtrading and why is it bad?
Overtrading is a significant issue for day traders, often leading to poor decision-making and financial losses. It’s defined as taking trades that aren’t really promising, but you take anyway out of impulse or other emotional triggers.
What triggers overtrading?
Common triggers for overtrading may include the desire to end the day in profit, the pressure to perform, frustration from previous trades, or the expectation to make money quickly. The desire to overtrade often comes from a focus on short-term outcomes rather than long-term goals.
Overcoming the threats
To combat overtrading, the focus should be on preventing the situations that lead to overtrading, rather than stopping overtrading itself.
Overtrading can hinder your consistency as a trader and needs to be addressed. The good news is that with persistence, determination, and consistency, you can overcome it and it rarely comes back as a significant issue.