Many aspiring traders don't reach professional levels because
they overtrade. They feel the more they trade, the more chances
they will have to
make
money
They subscribe to multiple newsletters (most without
written, fully disclosed, track records) and they are at the same
time watching the business channels looking for hot ideas. How is
this any different than going to a racetrack and buying all the
tout selections and also asking strangers "who they like"?
They
tradefor the rush. The more trades they do the better they feel.
Behavioral psychologists refer to this as compulsive behavior and
it's a serious weakness in any profession or activity.
one thing about over trading is -- the market is fractal --
trends develop, patterns emerge, statistics can be applied -- in
all time frames. So someone can be trading the daily chart or
someone can be trading the 60 min chart or the 15 or the 5 or the 1
-- and if they are trading well they will not over trade and they
will make money. You can over trade the daily time frame as
easily as the 1-minute timeframe. Or not.
Yes overtrading is a big problem with the majority of
traders.
Regarding discipline, the mechanical trading systems are very
good for new traders because they keep one disciplined and focused
because buy/sell signals are clear cut and are backed by statistics
instead of emotion and bias.
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3 Signs you are overtrading
Posted by bullbull on 14th of Jul 2009 at 01:36 am
http://www.tradingmarkets.com/.site/stocks/commentary/editorial/3-Signs-You-Are-Overtrading-81676.cfm
Many aspiring traders don't reach professional levels because they overtrade. They feel the more they trade, the more chances they will have to make money
. This is incorrect.
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Here are the following three ways to diagnose whether or not you're overtrading. Here's what non-successful traders do and you want to make sure you're not one of them
They're looking for action. Meaning instead of following a high probability trading methodology, they're taking trades on hunches with no statistical edges.
They subscribe to multiple newsletters (most without written, fully disclosed, track records) and they are at the same time watching the business channels looking for hot ideas. How is this any different than going to a racetrack and buying all the tout selections and also asking strangers "who they like"?
They trade for the rush. The more trades they do the better they feel. Behavioral psychologists refer to this as compulsive behavior and it's a serious weakness in any profession or activity.
one thing about over trading
Posted by Michael on 14th of Jul 2009 at 08:29 am
one thing about over trading is -- the market is fractal -- trends develop, patterns emerge, statistics can be applied -- in all time frames. So someone can be trading the daily chart or someone can be trading the 60 min chart or the 15 or the 5 or the 1 -- and if they are trading well they will not over trade and they will make money. You can over trade the daily time frame as easily as the 1-minute timeframe. Or not.
Bullbull, do you realize the
Posted by shamutooth on 14th of Jul 2009 at 07:04 am
Bullbull, do you realize the daytraders here made more $ yesterday than you have buying/holding the $SPX since 1997?
lol
Posted by gan_ on 14th of Jul 2009 at 07:33 am
lol
Yes overtrading is a big
Posted by matt on 14th of Jul 2009 at 01:59 am
Yes overtrading is a big problem with the majority of traders.
Regarding discipline, the mechanical trading systems are very good for new traders because they keep one disciplined and focused because buy/sell signals are clear cut and are backed by statistics instead of emotion and bias.