Overtrading!!

Recently I have been finding myself over trading, where as before I was trading well... ' waiting for levels, breakouts etc...' I am now finding myself trading for the sake of trading, the market (FTSE) may be in no mans land and going sideways, however I still insist on trading and consequently doing my ****, and being stopped out for the day. Which means I can't even trade when I see great set ups (yesterday for example) I know I am doing it but still seem to jump in the market at any given opportunity with fear of missing a profit.

I was wondering if anyone else had had this problem and if so, how you overcame it? I know there are alot of very good traders on this website and It would be great to get your advice and maybe even help on this matter.


Thanks

Pelzar!!

Pelzar,

I've suffered from this a lot before and wether due to trying too hard to repair a damaged account, overconfidence, or whatever it usualy comes down to me trying too hard to make too much money.

Try to take the more passive attitude of taking money that the market makes available, rather than actively going into the market to get money out.

Understand that on a particular day there may be hundreds of good opportunities and you make a killing, while on another there may be none and you don't make a trade. This doesn't by any means mean you were a better trader on the first day than the second just that the market was riper on the first. Sit back, relax, take the money the market offers you when it makes it available, and then at the end of the day judge yourself not by your p/l but by how well you know you traded.

This becomes easier when you bear in mind that if you take only £50 out of the market everyday, but do it everyday without too many roundtrips then you are doing far better than the vast majority of traders.


P.s. The other main cause of overtrading is boredom/thrillseeking. If you think this may be your problem then every time you find yourself doing it remind yourself why you are really trading and how harmful this is. If you can't do this and thrillseeking is more important to you than a career as a trader then trading may not be for you.

P.p.s While overtrading is a bad thing, being too passive, especialy when starting out, can stop you from learning as much and developing as fast in my opinion. You notice things more when getting involved and trying things out and learning from your mistakes so try to find a good balance between the two.
 
Overcoming overtrading

Hi Pelzar,

there's been a lot of good advice in the previous replies so I don't try to better them. However, my experience of overtrading and the "healing process" might be of some help to you. I think one can learn from somebody else's mistakes.

I started out three years ago with limited funds and no income from day job. I had a tremendous pressure as week after week I thought that by next week I'd have to make money to pay the bills. You don't have this pressure so you should be well ahead of me in terms of probabilities of success. :)

Anyway, I felt I had to try and catch each and every move. AND just like you I felt I had to trade even when there was volatility in the market. Otherwise, I felt, I'd be a bad trader. I mentally punished myself if I didn't trade when there was a move AND as a result I jumped in at wrong moment (after the move had already happened) and got stopped out. I was never at peace when trading and as a result missed most if not all of the good opportunities. I was nervous, anxious and afraid of getting it wrong. As a result I did get it wrong all the time!

I travelled to UK (from Finland) and paid a handsome sum of money to learn trading from someone who promised I'd learn a great deal from him. He gave me valuable insights but at the end of the day he wasn't a good enough teacher or a trainer to help me become successful. He taught me his method (all of it) and I tried desperately to apply his whole method in my early days of learning curve.

I tried to read level II, follow futures, use stock scanners and news services - all at once. In addition I tried to keep an eye on some dozen stocks that might move or where moving. You can imagine how low I felt. I was sure I was a failure as I couldn't do all that (and choose the entries and exits + apply stops that wheren't too tight) during those first weeks.

Another problem was that even though I could see that a lot of things that learned from this trainer did actually work, I was never convinced deep down that his method works well enough. I wanted to find ways to historically back test his ideas (and some other trading ideas I had) with a computer but couldn't find software that would allow testing of such complex trading ideas.

I was able to keep my trading going for a few months but then stopped and was forced to walk away from the whole thing (for financial reasons) for a year or so. I kept on following the market and tried to learn more but couldn't trade as there wasn't enough money to pay for the feed and trade.

That year was an important phase in my healing process (I really felt wounded after the trading experience).

When trading I had printed out the charts where I had marked the trades on. Under the charts I had written down the reasons for those trades and guess what, sometimes there was absolutely no reason or logic in those trades! Sometimes there was but I had a too tight a stop or missed most of the move as I covered too early.

This practise enabled me to go back (and I still do that) to those charts and really think what I was doing at the time. They allow me pin point (from this still image on the paper) what I should have been doing. I say still image because I think we traders are often action junkies that get a kick out of seeing loads of flashing numbers in the time & sales or Level II screens. It's good to take some distance to the whole thing and sit down in quiet to figure out what is going wrong. It's this peace and quiet that I want to transfer into my trading. All the action and flashing just turns me in a wrong mode: action junkie mode.

Nowadays I'm taking just a couple trades per week and rest of the time practise discipline by paper trading with the esignal paper trading system. My reasoning is that if I'm able to maintain the discipline while papertrading, then it can be done in the real trading as well. I can see that I'm on the right track now: I only trade one stock and follow only a couple of futures. I'm using multiple time frames but only for AAPL. This helps me to concentrate and learn on how AAPL behaves. There's no L2, no time & sales, no news services. - Just AAPL, Nasdaq and Smoothjazz.com
 
TrendTracker

This is interesting post. My story is very similar to yours.I hope I can overcome the obstacles and become a good trader. Learnign the trading myself for about 2 years now.

At this point I am trying to cut the trades to a necessary minimum per day as I work for somebody (so have this pressure when somebody ask you when you start trading or whatever). I wish to become consistent and stick to my plan.

I find that good plan, discipline and confidence are the keys.

I hope I can overcome the pressure.

Regards
 
Hi Pelzar,

I'm on a verge of quitting trading. Am disgusted with the way I kept letting emotions trade for me. Recently I traded 78 YM contracts within a day and that just wiped out my trading account! Am in a month of reflection right now trying to understand what should I have done and not done.

Well, it's the most difficult way of making a living if we are not in control of ourselves.

cheers.
 
Hi Pelzar,

I'm on a verge of quitting trading. Am disgusted with the way I kept letting emotions trade for me. Recently I traded 78 YM contracts within a day and that just wiped out my trading account! Am in a month of reflection right now trying to understand what should I have done and not done.
Well, it's the most difficult way of making a living if we are not in control of ourselves.

cheers.

yongp,

This could be the most important turning point for you so don't quit just yet. This is the time when you must dig deep inside yourself and find that extra ounce of courage to continue. Sometimes it takes bitter, painful lessons like the one you are experiencing to set you on the correct path. These are lessons you can't learn from a book, forum or website. Bitter, bitter experience is the greatest teacher. I hit my margin at least 4 times before it finally landed. Maybe I'm a slow learner...who cares...I understand now, without any doubt, what I ought to be doing, and especially, what I ought not be doing.
 
yongp,

This could be the most important turning point for you so don't quit just yet. This is the time when you must dig deep inside yourself and find that extra ounce of courage to continue. Sometimes it takes bitter, painful lessons like the one you are experiencing to set you on the correct path. These are lessons you can't learn from a book, forum or website. Bitter, bitter experience is the greatest teacher. I hit my margin at least 4 times before it finally landed. Maybe I'm a slow learner...who cares...I understand now, without any doubt, what I ought to be doing, and especially, what I ought not be doing.

new_trader,

Yes, it's a bitter experience. Painful even when i reflect on the obvious mistakes.
What's troubling is not figuring out a trading methodology to follow and sticking with it. Also on managing my discipline to follow the rules.

If i may ask, how long did you take to be able to achieve where you are making consistent return?

thanks, yongp
 
Yongp-you have enough capitol to trade 78 YM contracts per trade?????
If you have atleast 10k to trade with try trading just 1 YM contract at a time.
Risk management will allow you to take loss before you land big profitable trades.
 
new_trader,

Yes, it's a bitter experience. Painful even when i reflect on the obvious mistakes.
What's troubling is not figuring out a trading methodology to follow and sticking with it. Also on managing my discipline to follow the rules.

If i may ask, how long did you take to be able to achieve where you are making consistent return?

thanks, yongp

yongp,

It took me over 2 years to figure out my methodology and a further 12 months refining and honing my skill. I broke my rules many times and paid the price.
 
I believe one should treat trading as a job.
This has helped me tremendously
If you were doing a job generally you can't wait to finish it and head home.Trading should be treated the same way.
I wake up quite early and start my trading day at 6.30 most days I am done by 9.00
If my setups are not met I consider it unpaid overtime.
Defining a trading plan with working hours is the answer.
 
Yongp-you have enough capitol to trade 78 YM contracts per trade?????
If you have atleast 10k to trade with try trading just 1 YM contract at a time.
Risk management will allow you to take loss before you land big profitable trades.

I meant 78 trades a day of 1 or 2 contract per trade. Yes, that is very foolish.
 
Recently I have been finding myself over trading, where as before I was trading well... ' waiting for levels, breakouts etc...' I am now finding myself trading for the sake of trading, the market (FTSE) may be in no mans land and going sideways, however I still insist on trading and consequently doing my ****, and being stopped out for the day. Which means I can't even trade when I see great set ups (yesterday for example) I know I am doing it but still seem to jump in the market at any given opportunity with fear of missing a profit.

I was wondering if anyone else had had this problem and if so, how you overcame it? I know there are alot of very good traders on this website and It would be great to get your advice and maybe even help on this matter.


Thanks

Pelzar!!


If things did go well before theres no reason they cant again. If your plan is sound and clear then all you have to do is trade within it,you just need motivation. Why not set things up so if you deviate from your plan you will suffer pain, i dunno, what dont you like, public humiliation? 240 volts? nipple claps?, im guessin bleeding cash isnt enough right now! How bout making yourself accountable to someone! maybe TD, if you report to him that you have traded outside your plan he will stand up on his desk with a megaphone and detail your failings to the floor! If it doesnt work at the very least the boys will get a kick out it! ;).

Seriously tho.imo, you just need to find your motivation.

gl mon :)
 
Hunt on sight = get killed stone dead if not prepared

Good thread

Relate to Hunt on sight post by Crap Buddist, can be very damaging ! and very easy to fall into without realising

Similar temp solution to the problem (depends on your own method) as per nines post

twin screens / Have the small tf / entry tf on one and keep it switched off

observe market in the Hour tf and wait for your set up / price zone to be hit before switching on smaller tf screen.

Enter market Enter Stop & Target or Targets then switch off




End of the day it is a break down in discipline and Self control and must be removed at all costs

cause ?

On going project, not resolved / paper trading and exploring new work method / re-write rules / details of setup /entry exit and daily routine = the works

A complete do-over :) then another paper trial period to get the routine down to fully auto

then I can follow Gamma"s excellent advice and work for 2-3 hours a day also and be bored F..ckin stiff again :)

I think that small changes to my own entry method without a re-write of my own rules were the beginning / start of the problem =

very clever me, no need to bother writing rules up again and re-checking done all that = no point = waste of time, its only a small change or 2 or 3

Whats the point ?

Drift in method - emotion - reacting - more emotion = Bang your dead !



Ironically - my improved reading of the market skills in the lower tf, failure to consider downside of changes I made = fell into overtrading, infact for a bit thought I was trading better.

effects of overtrading = burn out = 10% rule reversed against yourself , in my case 13% of my trading activity did the damage the other 77% was well above average trade results

account stands at -35 % it woulda coulda shouda been + 50% in 6 months stood on my head, no effort whats so ever

Account Damage not fatal because risk at the market with 1st DA account was thankfully small as I at least anticipated I had plenty to learn, but never anticipated I could fool/deceive myself and let myself down so easy

Damage to the head box = ??? that could be fatal = jury is still out

I would stand by my advice offered on the other thread (link below)I should have followed it word for word myself. It covered the same problem and I posted under the user name blackbear at the time and would add ~

Check your trades every day, alert to drift in original method, introduce any changes after proper testing, give yourself time to build in the changes and make them automatic before going live with them.

Do not under estimate how easy it is to overtrade, the brain finds clever ways to run a loser or losing trade idea. I thought I had closed the door on this one a long time ago. It resurfaced in new cloths when I gave it the opportunity through my own careless approach.

http://www.trade2win.com/boards/day-trading-scalping/31099-how-did-u-overcome-overtrading.html

post 6


All the best all, and have a good weekend :clover:

Andy
 
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