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How To Avoid Over Trading?
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You’ll know who you are. If it rings a bell, then you probably see your account turning positive on a few good traders, then get all excited and lose it all and more in the next quick run. Normally just as you think to yourself, “I might be getting the hang of this”, you get another shock and you are disheartened and disillusioned. So what’s the difference between you and a pro then? Well, there are likely to be three things that you aren’t doing properly yet.
1. Keep a trading log
The first one relates to your trading log. To give you a real life example, one new trader we knew had a similar issue to the above - after winning a few good trades he would then go on a losing streak and give back all of his earnings. So like all good traders should, we advised him to keep a log of all of his trades, to specifically write down the exact time, signals and charts he was using. It turned out that when we reviewed his log at the end of the month, his problem was simple. In the UK morning session he made money, but in the US session he gave it all back. The solution? Stop trading at lunch.
2. Stick to a trade limit
The second challenge I suspect many of you are facing is your understanding of how many trades you should be placing. Most Pros aren’t in lots of trades a day, they are only trading when their targets and set-ups hit perfectly. It’s therefore important to avoid taking every possible trade, stop trying to jump on trades that have passed, and wait for your signals and be patient. If you don’t trade for several days or even a week it isn’t an issue, it is far more important that you are primed to play again tomorrow when a perfect set-up might come your way, than trade a rubbish set-up today and lose your capital.
3. Stop picking tops and bottoms
Unless you are an absolute pro, there is no need for you to be picking tops and bottoms. It is a very difficult style of trading, requires some incredible timing and there isn’t really any need for a Retail Trader. So a tip to new traders would be to trade with the current bias and trend. “The Trend is your Friend” is a line you’ve undoubtedly heard before, but it isn’t just a fancy saying for traders, it holds a lot of truth. If you are really struggling to trade with the current trend and bias, I suspect that it is because you have Twitter or similar, including a news feed or even a few analysts you follow who are providing potential turning points.
All these tricks are teach you in professional Forex training course by the best coaches.
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