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Learn to Trade

Don’t Let Overtrading Be Your Trading Downfall

By Rob on November 4, 2017

Reading Time: 4 minutes

There are many issues out there that could be your trading downfall if you don’t watch out for them, but overtrading might be the one that catches more people out than any other. It’s the most expensive. And it’s the mistake that makes people want to stop trading altogether. It’s also extremely easy to fall into it. So it’s important to look out for overtrading, and keep on top of what you are doing in the Forex trading markets.

But I’m Not Overtrading!

You may think you’re not overtrading. You may be absolutely sure of it. Only… when you think about it again – could overtrading actually be your trading downfall without you even realising it? Successful traders will know whether they are overtrading or not. They will be completely aware of their trading, and understand when they have (or are about to) go too far.

Those who are less successful never realise, and therefore keep making the same mistake, time and again. Overtrading has a nasty way of taking traders by surprise, so if you don’t know what to look out for, it’s all too easy to get carried out away then be in some serious trouble when your trading account – and perhaps all your other accounts too – becomes empty.

What To Look Out For

There are a few sure signs that you might have an issue, and that overtrading could easily be your trading downfall. One is that you keep changing your charts. If you have a good setup and it works for you, leave it alone. If you keep changing it in order to convince yourself it’s okay to put more trades on, that’s not good. You’re moving your own goalposts, as it were. And really, if you’re going to keep doing that, you may as well do away with the charts altogether and simply pick a trade out of thin air. It amounts to the same thing in the end.

Another sign of overtrading is quickly putting on another trade once you notice that you have made a profit, rather than checking your charts to make sure that the trade is a good one. Rushing like this just because you’ve had a good result won’t help matters – that profit will soon become a loss if you haven’t thought things through, and overtrading will certainly be your trading downfall.

How Can Overtrading Be Stopped?

The best way to stop overtrading is not to start overtrading. Simple? Perhaps. True? Definitely. And – ultimately – fairly easy once you think about it. Thinking is the key when it comes to getting your trading just right. Never rush. Never panic. Only trade when the circumstances are right. Don’t let emotion and getting caught up in the moment affect how you would trade if you weren’t excited about things. Keep a level head and overtrading won’t become your trading downfall.

Planning is the best way to prevent overtrading. It might mean that you can’t trade straight away. It might mean that you have to pause every now and then and that you can’t put a trade on for a week, two weeks, maybe more… But it also means that you will profit more times than you lose, and that is important. If you lose more than you win, you’re in trouble, and you will begin to overtrade to try to make up for it. Trading without thinking will be your trading downfall.

Don’t Worry About Not Trading

Many people think that if they’re not trading, they’re doing something wrong. They believe that to be a successful trader, they need to be trading all the time, at least every day, trade, trade, trade… Surely that’s what being a full-time trader is all about? You trade… all the time? But no, that’s not the case.

To be a successful trader, you need to trade successfully. That’s it. Trading all day every day is overtrading, and if you’re doing that, it will be your trading downfall. A successful trader will only trade when there is something to trade. They will only trade when a trade matches the conditions they have worked hard to plot on their all-important chart. If nothing matches, they will not trade. They will step away.

Putting a trade on when the conditions are not right will end in failure. Putting more trades on to make up for that failure will end in overtrading. And that could end your trading career. Do not over-analyse and worry if there are no trades. Don’t think you should just pick one anyway so that at least something is happening. Leave it. Patience is a virtue, and never more so than when it comes to successful Forex trading.

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The Lazy Trader is a publishing brand dedicated putting the fun back into finance, presenting powerful wealth creation strategies for a better world.


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The Lazy Trader is a publishing brand dedicated putting the fun back into finance, presenting powerful wealth creation strategies for a better world.

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