Trading psychology 5 minFREE
Overtrading: the fee machine
Real data: the more often people trade, the more they pay to lose.
Overtrading — opening trade after trade without a real reason — is the most expensive habit in trading, because every trade has a cost even when the price doesn't move.
Read that again: as a group, intraday traders would have been in profit before fees. The activity itself was the loss.
Signs you're overtrading
- You trade because the market is open, not because a plan says so.
- You can't explain your last three trades in one sentence each.
- Your number of trades goes up after losses.
The fix
Set a maximum number of trades per day (three is plenty), and a minimum quality: only trades written in your plan. Fewer, better trades almost always beat more trades.
Check what you’ve learned
Two questions from this lesson. Get both right to mark it as done.