THE STARTING PHASE-
coming to the phase of trading, many people start with the concept of earning a lot of money or recovering the loss that they just made in trading on the same day itself.
initially, we do think after getting a few wins here and there that this time we are going to win for sure and this momentum is continuous as we start thinking of this we suddenly encounter a loss and just cannot encounter the setback and just lose our euphoria and try revenge, ego & overtrading.
Overtrading, or excessive trading, can be detrimental to your trading performance and can lead to unnecessary losses. Here are some strategies to help you stop overtrading:
STRATEGIES TO IMPROVE OVER TRADING
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SET CLEAR TRADING GOALS– Define your trading goals and objectives. Establish specific targets for profitability and risk tolerance. Having a clear plan in place will help you focus on quality trades rather than engaging in excessive activity.
FOLLOWING A TRADING PLAN– Develop a trading plan that outlines your strategies, entry and exit criteria, and risk management rules. Stick to your plan and avoid deviating from it due to impulsive trading decisions or emotional reactions.
IDENTIFY HIGH-PROBABILITY SETUPS– Instead of trading on every opportunity, focus on identifying high-probability setups. Look for clear and strong signals that align with your trading strategy. This helps you filter out unnecessary trades and stay disciplined.
USE TRADE FILTERS- Implement trade filters to help you evaluate potential trades. These filters can include technical indicators, fundamental analysis, or specific criteria that a trade must meet before you consider entering. Using filters can reduce the number of trades you take and increase the quality of your trading decisions.
SET TRADING LIMITS– Establish limits on the number of trades you will take per day, week, or month. By imposing a limit, you create a structure that prevents you from overtrading and forces you to be selective with your trades.
AVOID CHASING TRADES – Avoid chasing after trades or trying to make up for losses by entering into trades that don’t meet your criteria. Stick to your plan and wait for high-probability opportunities that align with your trading strategy.
IMPLEMENT TRADING RULES – Develop and enforce specific trading rules that govern your behavior. For example, you can set a rule that restricts you from entering a new trade until a certain amount of time has passed since your last trade. Establishing rules helps you maintain discipline and avoid impulsive trading decisions.
TAKING BREAKS – Overtrading can be a result of being overly immersed in the markets. Take regular breaks from trading to clear your mind, gain perspective, and reduce the temptation to enter unnecessary trades.
TRACK AND ANALYZE YOUR TRADES- Keep a trading journal to record your trades and analyze your performance. Review your trades regularly to identify patterns of overtrading and understand the triggers behind them. This self-reflection can help you become more aware of your trading habits and make necessary adjustments.
SEEK ACCOUNTABILITY – Share your trading goals and progress with a trusted friend, mentor, or fellow trader. Having someone to hold you accountable can help you stay disciplined and avoid overtrading.
CONCLUSION-
trading comes along with lots of discipline and patience requirements, if a trader doesn’t focus on the “now moment” then it becomes very tough since the person will be thinking about the unexpected outcomes and the story that will link the person with the expectation due to which it will create fear in mind and anxiety in trading.
Remember that overcoming overtrading requires discipline, self-control, and adherence to a well-defined trading plan. Be patient and focus on quality over quantity when it comes to your trades.
YOU CAN ONLY BE SUCCEEDED WITH TRADING IF YOU CAN OBSERVE IT AS A BUSINESS RATHER THAN GAMBLING.
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