Does Over Trading Even Exist?

Great question from a long time Forex Trading Strategies visitor who asks:

What are your views on over trading or is there anything called over trading at all?

Now that I have pondered that often recited rule, if you are following a trading plan that you have tested and has an edge, how could you possibly be over trading?

You can’t be.

  • If you start skipping setups and triggers then you have changed the expectancy of the system.
  • If you take all the setups and triggers…you are keeping things consistent and following rules that you have set that make the expectation of the system, positive.

I’ve read on the internet what some say is over trading and that includes:

  • Switching time frames to look for setups
  • Adding to positions that you are already in
  • Jumping to different instruments

I don’t think that is a symptom of over trading – it is a result of not having a trading plan.

 

The Problem is NOT Over Trading

The problem is not treating trading like a business and acting like a professional which starts with having an actual trading plan.

It reminds me of those who say that the root of trading failures is trading psychology.  From my experience and even from the comments I get on this blog, trading psychology may be an issue but it is not THE issue.

The issue is people treating trading like a hobby. The fact that you can open a Forex trading account with $100 and many people do or brokers would not offer that, shows the type of people that trading attracts.

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Someone tossing $100 into a trading account will no doubt treat trading much differently than someone who puts in $20k.  Those will be the people who have no trading plan, risk too much money, jump from trading method to trading method……ultimately fail.

 

Over Trading Is A Symptom

Maybe it is time that people looked at the bigger issue and stop thinking with the dogma that plagues the trading industry (and sports…and business…).  The problem is much deeper than trading too much.

The problem is a mindset and a lack of consistency that has no doubt destroyed the trading account of so many traders.

If you choose this business, treat it as such and keep your expectations in line with the efforts and diligence you put towards it.