Gabrielle W

Follow me on Instagram @thechartwhisperers

April 17, 2020


Fewer Trades Means Higher Performance

The Dangers of Over Trading and What Causes It

Are you a day trader that gives much if not all back at the end of session? Are you a swing trader that takes substandard set ups due to the boredom of waiting on great ones? Have you ever experienced a large loss that turned into a series of larger losses, all in an effort to simply break even? All of us have been in these situations in our days as traders and today I’d like to highlight the dangers of over trading and how we can overcome it.


  1. We have limited will power

Throughout the day, our will power is chipped away every time we make a decision. Even more will power is chipped away by tiny stressors, let alone big ones. The more you trade, the less likely you are to stick to your true edge, and the less discipline you will have to follow your trading plan. 

  1. Over trading can activate fear, frustration and greed. 

The mental strain coupled with negative emotions will leave you too drained for real opportunities. Putting so much pressure on yourself for little makes a trader desperate and desperation leads to losses. 


  1. Statistics show a negative correlation between profit and number of trades.

Why fight a trend? Stay on the right side of this bet and don’t over trade!


What causes over trading and how can it be overcome?

This demon has a name and the name is FOMO! (fear of missing out). We all aim to make the most money possible in the market and to seize opportunity as it comes. What we sometimes fail to remember is what makes trading the market so special- THERE ARE ALWAYS OPPORTUNITIES. Not just opportunities, but GOOD ones and ones that are in accordance to your trading plan. Don’t trade like it’s the last 5 minutes in the Super Bowl, trade as if you have a lifetime and can only take a trade 10 times a year.

Tips to avoid over trading:

Have a trading plan and stick to it.

Limit your trades. Example: Day trader, 3 trades a day. Swing trader, 4 trades per month.

Have a max draw down and reset on your account. Reached your max draw down for the day/month? Take a few days off and don't trade again until you find your mistake, correct it and find a new set up that matches your trading plan.

Limit your wins. Yes… I said it. No one ever went broke taking profits. Closed a day maker, week maker or month maker? Seal in your profit by walking away and getting some exercise or leisure.


Need help creating a trading plan to avoid over trading? Click here.

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