How did u overcome overtrading?

[rags2riches]

biggest mistake of my trading career was getting sucked into all the BS on FF.
Leave well alone mate, you'll find all you need here

Ur right there is a ton more BS there with loads of curve fitters and voodoo peddlers ("if u use my 50 indicators based on Mars aligning with Jupiter you can make 1 pip a day guaranteed!" )

but there are some genuine posters (eg. Jacko, Feb2865, James16) who have my respect, the trouble is they are hidden amongst the crap.

I think it's good to check out what other ppl are up to from time to time even if you don't agree with it. Occasionally you come across something good.

 

[rathcoole_exile]

I think it's good to check out what other ppl are up to from time to time even if you don't agree with it. Occasionally you come across something good.

agreed, but there are still plenty of people to learn from here first - Rhody, dbp, FW99, Fibo, Nick Kruger, Options, Atilla, the list is endless of good, genuine people. (forgive me those whom i may have inadvertently omitted, no slur intended)

and once you understand the psychology that a simple coin toss is an effective Entry, there;s very little need to go beyond your OWN system, experience, set-ups etc

 

[rags2riches]

agreed, but there are still plenty of people to learn from here first - Rhody, dbp, FW99, Fibo, Nick Kruger, Options, Atilla, the list is endless of good, genuine people. (forgive me those whom i may have inadvertently omitted, no slur intended)

Indeed. There's a reason why I have yet to make a single post on similar forums - there's no need. They all deserve praise for the rehabilitation of beginners :clap:

 

[tblackw320]

Overtrading is so easy to do. After 15 years of trading I still find myself overtrading. Most of the time it is after I have had a big loss. The loss is genraly because of not following a more important rule of cutting my losses quickly. When I have my proffessional "non-emotional" hat on I don't have these problems, but we have to remember we are human. I like Joe Ross's methods he uses in his books. They are very simple and to the point. It lets us manage our entries and exits with a trading plan. I too like to use stop entries and exits. As in Joe's books, first try to break even, next get paid to trade, and then raise your stops as you go until your reach your objectives. I have also kept a trading journal through the years. When I review, it is always the simple things like not cutting my losses short or overtrading. Hang in there and enjoy the journey. It is a hard ride, but an exciting one.

 

[mp6140]

Mp -- Turkey Breast And Reduction In Trading !

i kinda learned a pretty simple concept reasonably early on --- if youre banging your head against a wall and it hurts, stop banging your head against a wall !

since i dont use stops (NOT FOR NEWBS OR THE FAINT OF HEART OR THOSE WITH SMALL ACCOUNTS) it became obvious that too many trades out there, all going in different directions was a recipe for disaster.

Now, in the US, with our present president, DISASTER is NOT what you want to face and so it was necessary to eliminate DISASTER from my trading or become REALLY good friends with what i describe as a "texas chain saw massacre"

Now i dont play video games, but i understand that if one goes from place to place haphazardly firing away at every shadow, pretty soon youre out of ammunition and if your out of ammunition, you dont stand much of a chance at all, and when you dont stand a chance at all, that is very BAD --- when youve got TOO MANY trades moving all over the place, youve invited the "margin call dude" in for tea, and he has a nasty habit of drinking your tea, taking your pipe tobacco, lovely blonde girlfriend, your mothers silver and your car !

So i went "cold turkey" --- now many describe "cold turkey" as being a very hard thing to do, but with a little mayonaise, on honey nut bread, cold turkey is a nice repast indeed, and so i added the mayonaise and decided to LEARN where all those pips go for holiday, just trade a few here and there, keeping in mind their final destination, and not get crazy unless i saw signs from G-D that the run would continue until the promised land !

Lo and behold, it came to pass that my finger could scratch my nose, pack my pipe or do a ton of mentionable and unmentionable things and that it did NOT have to hover above the BUY button for 24 hours of each day !

so while i cant promise it shall work for you, a bit of honey nut bread, a little mayonaise and a well sliced cold turkey breast might get you going in the right direction !

enjoy and trade well

mp

 

[rags2riches]

so while i cant promise it shall work for you, a bit of honey nut bread, a little mayonaise and a well sliced cold turkey breast might get you going in the right direction !

mp

lol! Yes I think that I should add that to my trading plan after 3 consecutive losses. Stop for the day and relax.

I am a breakout trader but I have not attained the correct mindset yet which is causing the problem. Trading is not a 9-5 so making a consistent daily profit is not a realistic expectation (having had the 9-5 mentality ingrained into me it will take a while to get rid of it). It is about treading water (small losses and gains) until you a hit a big winner.
Will I get whipsawed and hit by false breakouts? Yes. Does it matter? No. Let's put Occam's Razor to the test.

Forex is a trendy market so there will be big trending days - this is where I make money and run my winners, giving me a positive expectation.

Once I am confident with this and I can flawlessly identify, set and forget trades using a trailing stop, I believe I will be well on my way.

See what happens next week....

 

[mp6140]

lol! Yes I think that I should add that to my trading plan after 3 consecutive losses. Stop for the day and relax.

I am a breakout trader but I have not attained the correct mindset yet which is causing the problem. Trading is not a 9-5 so making a consistent daily profit is not a realistic expectation (having had the 9-5 mentality ingrained into me it will take a while to get rid of it). It is about treading water (small losses and gains) until you a hit a big winner.
Will I get whipsawed and hit by false breakouts? Yes. Does it matter? No. Let's put Occam's Razor to the test.

Forex is a trendy market so there will be big trending days - this is where I make money and run my winners, giving me a positive expectation.

Once I am confident with this and I can flawlessly identify, set and forget trades using a trailing stop, I believe I will be well on my way.

See what happens next week....

=========================================================

returning to the world of "seriousness" for a millisecond, while i dont know what causes your losses (too tight a stop might be one reason, as it usually is) EXPERIENCE is the all enveloping asset and weapon in this game !

I WOULD WAGER THAT YOURE ENTERING YOUR ANTICIPATED BREAKOUTS far too soon, more on EXPECTATION of the breakout than the actual breakout itself.

allow me a moment --- do you notice (you would if you used trendlines or my LRC) how whatever youre trading comes to resistance and STOPS ??????

at that point, most wise traders are selling like mad --- some are shorting into the rally in anticipation of the normal reversal, some are BUYING, having just noticed the rally and now wagering it will continue UP, but heres what I DO !

normally i would wager for the trade to reverse, unless ive seen NUMEROUS attempts at breaking through, at which time i would do 2 things --- place a BUY STOP ABOVE AND BELOW the present price --- the BUY stop is placed so that the trade can move above resistance and im entered on that momentum --- the SELL stop is placed so i enter a SHORT on the reversal ------THIS is what I advise, although its not how i normally trade.

NORMALLY, i will know the trend and the history of the instrument im trading and watch my own set of indicators to see strength at the breakout point, including VOLUME --- my MACD setup will show me any divergencies from the current move, and MOST of the time, will guide me thru, showing me whether to go LONG or SHORT (unfortunately in a slow market, the indicators dont always have enough "momentum" to show clearly, and thats where the experience comes in !

I use two sets of charts with enough circles and arrows and squiggly lines to drive anyone nutzoid, as it does to me often, but carefully used, i do get some good answers.

so until you KNOW youre ABSOLUTELY SPOT ON CORRECT, remember that buying at resistance, NO MATTER WHAT, will see some downside reversal take place ESPECIALLY IF ITS GOING TO BE A BREAKOUT --- the mms are lowering the price, scaring the dumb money into selling cheap shares and when they gobble up those cheap shares, WILL NOW REVERSE THE DOWNSIDE MOVE AND BREAKOUT !

I will bet dollars to a cops doughnuts that youre either suffering through the reversal and get stopped out while the price continues to drop, or you get caught in a classic "reversal to grab shares" and get stopped out !
Understand that EVEN IF THE PRICE WILL GO UP, it will RETRACE FIRST and then gain strength to break thru, much as a pole vaulter must move back, to be able to run forward and clear the pole !hope that helped

mp

 

[nine]

So until you KNOW youre ABSOLUTELY SPOT ON CORRECT, remember that buying at resistance, NO MATTER WHAT, will see some downside reversal take place ESPECIALLY IF ITS GOING TO BE A BREAKOUT --- the mms are lowering the price, scaring the dumb money into selling cheap shares and when they gobble up those cheap shares, WILL NOW REVERSE THE DOWNSIDE MOVE AND BREAKOUT !

I will bet dollars to a cops doughnuts that youre either suffering through the reversal and get stopped out while the price continues to drop, or you get caught in a classic "reversal to grab shares" and get stopped out !
Understand that EVEN IF THE PRICE WILL GO UP, it will RETRACE FIRST and then gain strength to break thru, much as a pole vaulter must move back, to be able to run forward and clear the pole !

This is one of Mike's gems.

You may have to go down a timeframe to see this behaviour. And maybe there are no obvious market makers in your market but the "big boys" need to do the same thing to get filled advantageously. And sometimes you will miss a breakout that just breaks out (you need to study how it does or doesn't happen in your market).

So test it out and figure out how to take advantage of it.

 

[rags2riches]

=========================================================

returning to the world of "seriousness" for a millisecond, while i dont know what causes your losses (too tight a stop might be one reason, as it usually is) EXPERIENCE is the all enveloping asset and weapon in this game !

I WOULD WAGER THAT YOURE ENTERING YOUR ANTICIPATED BREAKOUTS far too soon, more on EXPECTATION of the breakout than the actual breakout itself.

allow me a moment --- do you notice (you would if you used trendlines or my LRC) how whatever youre trading comes to resistance and STOPS ??????

at that point, most wise traders are selling like mad --- some are shorting into the rally in anticipation of the normal reversal, some are BUYING, having just noticed the rally and now wagering it will continue UP, but heres what I DO !

normally i would wager for the trade to reverse, unless ive seen NUMEROUS attempts at breaking through, at which time i would do 2 things --- place a BUY STOP ABOVE AND BELOW the present price --- the BUY stop is placed so that the trade can move above resistance and im entered on that momentum --- the SELL stop is placed so i enter a SHORT on the reversal ------THIS is what I advise, although its not how i normally trade.

NORMALLY, i will know the trend and the history of the instrument im trading and watch my own set of indicators to see strength at the breakout point, including VOLUME --- my MACD setup will show me any divergencies from the current move, and MOST of the time, will guide me thru, showing me whether to go LONG or SHORT (unfortunately in a slow market, the indicators dont always have enough "momentum" to show clearly, and thats where the experience comes in !

I use two sets of charts with enough circles and arrows and squiggly lines to drive anyone nutzoid, as it does to me often, but carefully used, i do get some good answers.

so until you KNOW youre ABSOLUTELY SPOT ON CORRECT, remember that buying at resistance, NO MATTER WHAT, will see some downside reversal take place ESPECIALLY IF ITS GOING TO BE A BREAKOUT --- the mms are lowering the price, scaring the dumb money into selling cheap shares and when they gobble up those cheap shares, WILL NOW REVERSE THE DOWNSIDE MOVE AND BREAKOUT !

I will bet dollars to a cops doughnuts that youre either suffering through the reversal and get stopped out while the price continues to drop, or you get caught in a classic "reversal to grab shares" and get stopped out !
Understand that EVEN IF THE PRICE WILL GO UP, it will RETRACE FIRST and then gain strength to break thru, much as a pole vaulter must move back, to be able to run forward and clear the pole !hope that helped

mp

Sorry I lied about longer timeframes! For this type of breakout trading I am using 5 min charts not longer term charts so I can get in early on any developing trend. The pattern of breaking out and retracing back to either a moving average or previous support/resistance thus creating a pivot is very common and noticeable on 5 min charts.

My biggest problem has been trying to run before I can walk - learning loads of methods and techniques and trying to spot all the setups which was the dumbest idea I have had in a long time. If I can't master 1 setup what is the point of looking at 4 or 5.

My first experience of day trading was on the FTSE and Dow Jones trying 3 min breakouts. These indexes seem to specialise in spiking local highs/lows and shaking out weaker players (must be all the sharks hungry for blood). This caused me to have a phobia about breakout trading which I have only recently overcome.

Anyway, I am now concentrating exclusively on just this 1 simple idea and I believe I can make it work. I may consider adding to the position on retracements later on down the line.

I still need more practice - bit slow off the mark this morning, missing eur/usd and usd/jpy but I will get better.

[PS: I have come across several traders now recommending no stops and while I believe it does work, I have neither the experience, capital or stomach to endure it.]

 

[mp6140]

Sorry I lied about longer timeframes! For this type of breakout trading I am using 5 min charts not longer term charts so I can get in early on any developing trend. The pattern of breaking out and retracing back to either a moving average or previous support/resistance thus creating a pivot is very common and noticeable on 5 min charts.

well, im not a breakout trader, as ive often mentioned -- actually i usually get in late because im cautious about "breakouts", and need some solid confirmation. Im prob more a support to resistance kinda trader, which can be used on ANY timeframe with equal success --- Ive given up on the "catch a rising star" form of trading and just go in and out of the market whenever i see support or resistance has been hit on SOME timeframe (i often play ALL of them in one days time)

"breakout trading" seems a bit dangerous to me at times as its MUCH harder to nail a tp point, what with SO MUCH resistance usually being above the present price --- not impossible, but "harder" for me, at least ! Length of run is something i can identify fairly well if the price is working "within" the LRC bands, but once it rises ABOVE the LRC, "NORMAL" thought is that it will retrace fairly quickly, so i "normally" dont play that way !


My biggest problem has been trying to run before I can walk - learning loads of methods and techniques and trying to spot all the setups which was the dumbest idea I have had in a long time. If I can't master 1 setup what is the point of looking at 4 or 5.

LOL -- yeah, i went thru that also ! aint fun !

My first experience of day trading was on the FTSE and Dow Jones trying 3 min breakouts. These indexes seem to specialise in spiking local highs/lows and shaking out weaker players (must be all the sharks hungry for blood). This caused me to have a phobia about breakout trading which I have only recently overcome.

Anyway, I am now concentrating exclusively on just this 1 simple idea and I believe I can make it work. I may consider adding to the position on retracements later on down the line.

I still need more practice - bit slow off the mark this morning, missing eur/usd and usd/jpy but I will get better.

WHAT I HAVE FOUND TO BE THE ULTIMATE trading highlight in my life was when IT JUST DIDNT MATTER ! When i could wake up in the morning and GO OUTSIDE to smell the roses, then trading became, "relatively speaking", something I could do peacefully or even just PASS on for the day or just pop a trade here and there while relaxing !

[PS: I have come across several traders now recommending no stops and while I believe it does work, I have neither the experience, capital or stomach to endure it.]

it IS becoming more popular as ive been shouting it from the tree tops for 3 years now, BUT IT HAS TO BE USED BY THOSE WITH EXPERIENCE !

Keep it in mind for "down the road", when you can nail trends, future trends and have a lot more experience ---- i believe it works wondefully, but it does need experience !

enjoy and trade well

mp

 

[Bear142746]

I created my own set of rules for risk/reward for a day. Here are some:

If at x% gain in a day (24 hour period), then I stop trading for the day; if at y% loss in a day, then I stop trading for the day. I found that if I let it drop below a certain point, then I wasn't thinking clearly.

Each trade is it's own. If you are still thinking about the last "loss" trade, then you won't trade the current trade properly. (coll: don't try to make up a loss trade with a stronger win trade)

While developing/testing/learning a new strategy, only risk minimal amounts (.5-1% risk at most)

If you didn't follow your strategy, then you drop down from your current risk level to a minimal amount (e.g. if you are trading 1% on each trade, then drop down to 0.1% or lower) until you show success in following your strategy.

I won't go into the rest
- Bear

 

[teezeike]

A question to all the successful daytraders out there, be they scalpers or hourly traders - how did u manage to overcome overtrading and the bad days where u have a complete meltdown (like the one I had on Friday Thankfully they are diminishing in frequency)?

I am finding Trading In The Zone by Mark Douglas helpful.

Hi,

Overtrading is 50/50% chance gambling excluding commission or spreads.

High probability trading means fewer trades with solid strategy for entry/exit.

In the market...none MUST guess the overall market direction (sentiment). You can get this from several news sources, maket internals, pre-market actions and initial market actions. It takes experience and solid macro knowledge to guess correctly. It is still a guess though...but armed with these above...it tends to be 60~90% correct.

After the market direction...then look for market low/high range. Determine your stop/limit points.

Once you get the market direction....orders placed within daily lows/highs could win 80~90% of the time. At you could see the need for 0~4 trades per day.

1. Remember every trade is entered based on emotional disposition activated by news and market internals. Anyone that says otherwise is "mechanically" following charts. Market is quite dynamic and one needs to be nimble about it.

2. Market rarely changes overall direction in 1 day. On a trend day this is evident. On a range bound day you could see a 2-sided action going one direction.

3. Technical Support/Resistance Levels are VERY useful and the only leading indictors to help you enter and exit trade. They are NOT calculated..they are estimated by historical observation of actions.

4. Look at the BIG picture...US$...Energy and government actions. They work.

*** WATCH THIS***
At this stage...some stocks have been trading far below value...
US Government wants to devalue $ to pressure China and help home industries and jobs.
EU countries are losing out to USA in this regard.
For now, US wants to pacify EU and the $ could firm till next few weeks. That means the overall market should edge up till S&P 1450/1460 area. After this look for $ to fall sharply again and the market to edge down substantially for the real bottom.

 

[wata]

IMO overtrading is caused by not following your trading plan. And if you are then your rules are to general. My son who I am teaching has had a hard time staying with his plan and overtrades.If you have not done so write down your rules on entry,exit and when not to trade and when to trade based on your trading method.You will find that following your own rules will be hard, but keep at it.



Good luck

 

[mp6140]

MP == is there such a THING as overtrading ??

IMO overtrading is caused by not following your trading plan. And if you are then your rules are to general. My son who I am teaching has had a hard time staying with his plan and overtrades.If you have not done so write down your rules on entry,exit and when not to trade and when to trade based on your trading method.You will find that following your own rules will be hard, but keep at it.
Good luck

===============================================================

what i see from people who have slowed their trading down from what might be considered "overtrading", is that TIME and EXPERIENCE seem to do it all by themselves --- after a while you simply start taking the good trades, and leaving the not so good --- its a TIME process that leads to KNOWLEDGE of what IS good or bad, and the experience to put the two together for a successful trade that you dont need to revisit or modify or add to !

what bothers me is WHAT IS OVERTRADING ??

i can have 20 trades out, with many not coming home for hours or days --- is THAT overtrading ?

or is overtrading simply having so many trades moving around, that your account is in very close danger ?

dont know

mp

 

[wtrader]

A question to all the successful daytraders out there, be they scalpers or hourly traders - how did u manage to overcome overtrading and the bad days where u have a complete meltdown (like the one I had on Friday Thankfully they are diminishing in frequency)?

I am finding Trading In The Zone by Mark Douglas helpful.

by using 1 to 3 high probability setups only you wont overtrade. overtrading comes from forcing setups and/or not really having defined setups. to gain the edge your setups should have at least a 50% win ratio and you shoul go even further to filter this by only taking trades with a good risk\reward ratio to overcome the losers

 

[rathcoole_exile]

It is still a guess though...but armed with these above...it tends to be 60~90% correct.

spurious stats thrown about with gay (sic) abandon, love it

 

[rags2riches]

50% chance to win is NOT necessarily gambling.

I believe the following could overcome overtrading for me:

1. Have a system with a positive expectancy
2. Make sure you have realistic expectations - no point throwing the toys out of the pram if you have a losing day if this is to be expected.
3. Make sure the system fits your personality.

Thanks for all the feedback so far!

 

[rathcoole_exile]

Tribal Wars - The browser game set in the middle ages

WARNING: You may take it more seriously than trading!!

damn you newtrader !!! :cheesy:

I AM hooked !!!!

now i'm trying to combine trading, advisor duties, general board surfing and now playing this bloody game !!

And it's all YOUR fault !!!


Thanks, I love it :clap:

 

[dbphoenix]

A question to all the successful daytraders out there, be they scalpers or hourly traders - how did u manage to overcome overtrading and the bad days where u have a complete meltdown (like the one I had on Friday Thankfully they are diminishing in frequency)?

I am finding Trading In The Zone by Mark Douglas helpful.

Get a chair with a wicker seat. Cut out the seat.

Place a tennis racket on a pivot underneath the chair with the handle pointing forward.

Take off your clothes.

Sit down and rest your foot on the handle.

When you find yourself overtrading....

 

[0007]

Get a chair with a wicker seat. Cut out the seat.

Place a tennis racket on a pivot underneath the chair with the handle pointing forward.

Take off your clothes.

Sit down and rest your foot on the handle.

When you find yourself overtrading....

Nice to hear from you db !