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Overtrading is the most common problem, especially for traders trading on lower timeframes. It can arise for a number of reasons, so if you don't know what the main purpose of your trading is - i.e., what instruments you trade on, how you trade, what your trading strategy is, your motivations, personal styles and your trading and personal history I will give some explanations why traders become addicted to trading and give some possible solutions to this problem, hoping that among them you find your own solution.
In order to determine when you become overly active, you need to have some basic criterion with which you can build off and thus be able to determine the amount of deviation from this value - it could be, for example, the number of trades made or your trading volume. Of course, there can be situations where a high trading frequency is acceptable, such as when markets are volatile and there are significantly more trading opportunities than usual.
1️⃣ Emotional Trading
This happens when a trader trades forex, transfixed by feelings of excitement and pleasure, rather than for profit. Just like most people who play in a casino. If your goal is solely to have fun and get emotionally excited, then you must also realize that in the long run you are likely to develop an addiction to trading, and you are unlikely to profit. If you want to profit from your trading, then you need to change your goals, forget the fun and excitement, and move to a more professional and structured approach whose desired result would be trading productivity expressed in monetary or percentage terms.
2️⃣ Lack of trading strategy
When a trader does not have a rule-based strategy and, therefore, any parameters for determining when to trade and when not to trade, any price movement in the market tempts him. In this situation traders are very prone to chase trends and often find themselves buying when the trend is down and selling when the trend is up. They get the impression as if they are doing everything in vain, as if the market is watching their actions.
Do you know this situation? The most important thing you can focus on is developing your trading strategy, which clearly identifies whether there is a particular trading opportunity, fundamental data, technical analysis or a combination of both. This will help you become more selective in your trading.
3️⃣ Boredom
In a quiet market where traders spend most of their time in front of their computer screens, there will be times when there are weak or no trading opportunities. It’s time when traders can get bored. These are natural periods in trading. For some traders, this can be very challenging especially for beginners, traders whose trading activity is based on emotional excitement, who work on enthusiasm. An important question you should ask yourself is the following: "Am I trading to relieve boredom or to make money?"
4️⃣ You need the money
This is one of the worst situations in trading. It is a strong and powerful state, but it will not contribute to good trading overall if your decision-making is focused solely on making money and not on your trading strategy. Evaluating your financial needs and the effectiveness of your trading is very important. And you don't have to adjust your search for entry signals with what you don't have enough for beer. Any action you can take to alleviate your acute need for money will be a big step forward for you.
5️⃣ Enthusiasm in Trading
Novice traders are full of enthusiasm. Traders who are entering new markets and using new trading methodologies also tend to be more enthusiastic and passionate. While this enthusiasm is undoubtedly a positive quality, there is also a dark side to it, seeing it as excessive enthusiasm and looking for any opportunity to open a trading position.
Maintain your enthusiasm, but channel it into developing your trading strategy and discipline. If you have certain trading considerations, practice them on a simulator/demo account, where costs are obviously much lower.
6️⃣ Lack of Patience
Traders who suffer from a lack of patience become addicted to trading because they will take opportunities that are not part of their trading strategy, and thus they will naturally make more trades than necessary. Develop patience in yourself, look for opportunities to analyze the markets, and take the time to just look at them rather than act on them. You might want to try practicing self-awareness to help identify and work with overcoming the desire to alleviate feelings of impatience.
7️⃣ Revenge Trading
This is when traders have lost money in losing positions, making mistakes or accidentally opening positions, etc. and are usually eager to "get their money back". Despite the fact that the goal of such behavior/thought is positive, the subsequent behavior usually is not. Simply put, a desire to "get even".
Traders chasing their losses will deviate from their trading strategy by opening positions that are probably profitable, whether they are consistent with their trading strategy or not, for, according to their psychological mindset, their goal now will be to make money, not to stick to their trading strategy. If you have incurred major losses or lost a large amount of money in a number of trades, you should generally take a time out. This timeout will allow you time to redirect your trading state and refocus, and most importantly, it will break the "losing money → feeling angry → wanting your money back" behavioral pattern. Time out breaks this behavioral pattern and allows you to refocus - use breathing and relaxation techniques or take a slow walk that will help you dilute your emotions and reduce your desire for revenge trading.
8️⃣ Fatigue
When you are tired, physically or mentally, your brain does not have enough energy to function at full capacity, and with low "fuel" your work will have low levels of self-control.
It is self-control, not a trading strategy, that is needed to engage the brake in your brain to stop your trading, and that requires a source of energy. When you are tired and your fuel level is low, your self-control will also be low, there will be more chances for excessive and unreasonable trading. Rest and glucose (which we get with food and sweets) are the two main factors in optimizing brain function on the energy level. When you trade, you must be firmly convinced that you are awake and full of energy.
✅ Thus, there are several reasons why traders overtrade, and I have provided you with some possible solutions to help you overcome them. Analyze which one might be most appropriate to your situation, test them out and write about them in the comments.
Overtrading is the most common problem, especially for traders trading on lower timeframes. It can arise for a number of reasons, so if you don't know what the main purpose of your trading is - i.e., what instruments you trade on, how you trade, what your trading strategy is, your motivations, personal styles and your trading and personal history I will give some explanations why traders become addicted to trading and give some possible solutions to this problem, hoping that among them you find your own solution.
In order to determine when you become overly active, you need to have some basic criterion with which you can build off and thus be able to determine the amount of deviation from this value - it could be, for example, the number of trades made or your trading volume. Of course, there can be situations where a high trading frequency is acceptable, such as when markets are volatile and there are significantly more trading opportunities than usual.
1️⃣ Emotional Trading
This happens when a trader trades forex, transfixed by feelings of excitement and pleasure, rather than for profit. Just like most people who play in a casino. If your goal is solely to have fun and get emotionally excited, then you must also realize that in the long run you are likely to develop an addiction to trading, and you are unlikely to profit. If you want to profit from your trading, then you need to change your goals, forget the fun and excitement, and move to a more professional and structured approach whose desired result would be trading productivity expressed in monetary or percentage terms.
2️⃣ Lack of trading strategy
When a trader does not have a rule-based strategy and, therefore, any parameters for determining when to trade and when not to trade, any price movement in the market tempts him. In this situation traders are very prone to chase trends and often find themselves buying when the trend is down and selling when the trend is up. They get the impression as if they are doing everything in vain, as if the market is watching their actions.
Do you know this situation? The most important thing you can focus on is developing your trading strategy, which clearly identifies whether there is a particular trading opportunity, fundamental data, technical analysis or a combination of both. This will help you become more selective in your trading.
3️⃣ Boredom
In a quiet market where traders spend most of their time in front of their computer screens, there will be times when there are weak or no trading opportunities. It’s time when traders can get bored. These are natural periods in trading. For some traders, this can be very challenging especially for beginners, traders whose trading activity is based on emotional excitement, who work on enthusiasm. An important question you should ask yourself is the following: "Am I trading to relieve boredom or to make money?"
4️⃣ You need the money
This is one of the worst situations in trading. It is a strong and powerful state, but it will not contribute to good trading overall if your decision-making is focused solely on making money and not on your trading strategy. Evaluating your financial needs and the effectiveness of your trading is very important. And you don't have to adjust your search for entry signals with what you don't have enough for beer. Any action you can take to alleviate your acute need for money will be a big step forward for you.
5️⃣ Enthusiasm in Trading
Novice traders are full of enthusiasm. Traders who are entering new markets and using new trading methodologies also tend to be more enthusiastic and passionate. While this enthusiasm is undoubtedly a positive quality, there is also a dark side to it, seeing it as excessive enthusiasm and looking for any opportunity to open a trading position.
Maintain your enthusiasm, but channel it into developing your trading strategy and discipline. If you have certain trading considerations, practice them on a simulator/demo account, where costs are obviously much lower.
6️⃣ Lack of Patience
Traders who suffer from a lack of patience become addicted to trading because they will take opportunities that are not part of their trading strategy, and thus they will naturally make more trades than necessary. Develop patience in yourself, look for opportunities to analyze the markets, and take the time to just look at them rather than act on them. You might want to try practicing self-awareness to help identify and work with overcoming the desire to alleviate feelings of impatience.
7️⃣ Revenge Trading
This is when traders have lost money in losing positions, making mistakes or accidentally opening positions, etc. and are usually eager to "get their money back". Despite the fact that the goal of such behavior/thought is positive, the subsequent behavior usually is not. Simply put, a desire to "get even".
Traders chasing their losses will deviate from their trading strategy by opening positions that are probably profitable, whether they are consistent with their trading strategy or not, for, according to their psychological mindset, their goal now will be to make money, not to stick to their trading strategy. If you have incurred major losses or lost a large amount of money in a number of trades, you should generally take a time out. This timeout will allow you time to redirect your trading state and refocus, and most importantly, it will break the "losing money → feeling angry → wanting your money back" behavioral pattern. Time out breaks this behavioral pattern and allows you to refocus - use breathing and relaxation techniques or take a slow walk that will help you dilute your emotions and reduce your desire for revenge trading.
8️⃣ Fatigue
When you are tired, physically or mentally, your brain does not have enough energy to function at full capacity, and with low "fuel" your work will have low levels of self-control.
It is self-control, not a trading strategy, that is needed to engage the brake in your brain to stop your trading, and that requires a source of energy. When you are tired and your fuel level is low, your self-control will also be low, there will be more chances for excessive and unreasonable trading. Rest and glucose (which we get with food and sweets) are the two main factors in optimizing brain function on the energy level. When you trade, you must be firmly convinced that you are awake and full of energy.
✅ Thus, there are several reasons why traders overtrade, and I have provided you with some possible solutions to help you overcome them. Analyze which one might be most appropriate to your situation, test them out and write about them in the comments.
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bit.ly/3spSQqC
🔻FREE Telegram channel🔻
t.me/DeGRAMChannel
🔻Contact for Paid SIGNALS🔻
t.me/DeGRAMForex