Too Eager to Trade

[reversal king]

1 of the biggest challenges that newbies face is OVER TRADING!!!!! The Fear of missing a good move or what could be a great trade is too big to resist and so you execute…but this only ends up in more losses time and time again.

Focus on what the market is doing, pay close attention to price action. Simple price action like higher highs and lower lows around important levels can give some good clues. Put your emotions aside and trade what you see not what you think you see or could see….

For me the biggest emotion to overcome was FEAR. I had no trouble making cash trading but rather had HUGE issues letting my winners run. I always felt that I had to pocket my profits now before the market turns and eats away my profits…Also, I had a fear of missing the next “Big Move” and would find myself in trades thinking….”Why did I get into this trade?” which in the end took away the small profits I had already made.

Look at yourself and the person you are, try to pin point your weaknesses because trust me the market will find your fears and weaknesses. Work on what you feel your weaknesses are. This is not an easy task and also takes a long time to overcome.


Good Luck.

 

[everyonerich]

after learn several new technique, newbie tend to overconfident and market humbles them again.

 

[cuotes]

What Does Overtrading Mean?

1. Excessive buying and selling of stocks by a broker on an investor's behalf in order to increase the commission the broker collects.

This situation has been known to arise when brokers are pressured to place a newly issued security underwritten by a firm's investment banking arm.

Also known as "churning".

2. A situation in which a company is growing its sales faster than it can finance them. This usually leads to enormous accounts payable or accounts receivable and a lack of working capital to finance operations.

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When you say that "The Fear of missing a good move or what could be a great trade is too big to resist and so you execute" I assume that you are talking about too many operations, right?

But also the second meaning is applicable here.
If you are suffering from undercapitalization, you have to overtrading your account, risking an amount of money per operation bigger than it should be.

You can control the "too many" issue, after all it's just a psychological matter.
But the "too much" issue is difficult to address, until your account stop suffering from undercapitalization.

i.e Your account is 5000€, and every single contract you trade is 2000€ margin... you are overtrading even if you just make one operation per week.
But... you have to!!!!

 

[reversal king]

Exactly Cuotes, too many trades rather then the size of trades. Over trading with size is a different ball game and will only be a matter of time until one gets wiped out all together.

Even with small accounts of say 5K or less, the main objective is to learn to trade well and make profits consistently, trading with bigger size does not help in any way and will affect your account negatively unless you are consistent at making profits and have a high win ratio then the larger risk would make sense.