Over trading, is it a problem for you? | Forex Factory

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Over trading, is it a problem for you?

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  • Do you overtrade?
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  • #1
  • First Post: Jul 9, 2011 11:42pm Jul 9, 2011 11:42pm
I'm wondering how many traders find themselves over trading, and what are the techniques to kill the urge. I have found that running an EA helps me reduce my manual entries and wait for the great set-ups.

I started running an EA that uses the 4 hr TF, trades are open for a day to a couple of weeks, so when I open up my platform I'm in positions and can monitor them. I don't find myself tinkering either, I let it roll. I do confess though that overtrading has killed my account somewhat. The EA has built it back up to where I had my inital deposit (almost)
Tipster Trendlines - Trade from the chart
  • #2
  • Jul 11, 2011 4:19pm Jul 11, 2011 4:19pm
How have you adapted to get it under control?

I'm writing a trading plan. To tell you the truth, I don't see this working, but when I think about it in comparison to my day job as a project manager, I can see how it would work and always have the barrell aimed in the right direction, so you could pull the trigger at the right time.

What help you (the reader...) get it under control?
Tipster Trendlines - Trade from the chart
  • #3
  • Jul 11, 2011 5:26pm Jul 11, 2011 5:26pm
I am trying to develop a scalping technique of my own and I've already noticed a dangerous pattern emerging. I trade during London and New York sessions (I am GMT+1) and frequently manage to make a decent profit until noon, which profit I kindly give back to the market usually with a nice interest by trading during afternoon hours
It doesn't bother me right now that much - as I am testing and building the strategy and want to trade as much as possible but once I consider it ready I will have to devise a way to curb this tendency of mine.
I think of setting a low fixed daily pip profit at first and then increasing it as I gain experience and know when my self-confidence is to be trusted. I guess 10 pips a day at first should be more than enough. I will see whether i have the discipline to follow the rules but I am pretty sure I will get chewed up if I don't.
  • #4
  • Jul 11, 2011 9:29pm Jul 11, 2011 9:29pm
I am also prone to overtrading. I limit my trading to specific time frames on specific days of the week. I treat those rules as ironclad as the rules about stop losses and percent risked on each trade. I have a demo account that I use for fluff....experimenting, exploring, and doing the 'what ifs'. I never, ever, ever trade live on hours that violate the rules.

Don't know if that helps, but I think i have managed to get the overtrading under control. That plus I have checklist. I imagine myself in a cockpit doing a pre-flight checklist. As I get close to executing the order, I imagine the engine starting to rev up, and when I am ready for takeoff I actually verbally say "liftoff'.

My checklist is some of the rules I use....mentally checking to see if there is a psychological barrier (1.9000, .8000 etc), if it is a news day, inputting my risk calculations, checking for day light savings time, confirming no tsunamis or other major events, calculating exit strategy, estimating S/R levels. by that time i have expended 3-5 minutes at least.

yup, I'm a little nutty,, but it helps me with the same problem you have. Nowadays, if I feel the urge for a quick and thoughtless entry, I just draw an imaginary line instead of executing an order. 99% of the time I look back and say thank god I have rules (and a neat imaginary horizontal line to mark the woulda coulda shouldn'ta....hope this helps!
  • #5
  • Jul 11, 2011 9:45pm Jul 11, 2011 9:45pm
I trade based on levels I determine long before price arrives there. I don't worry about over trading, as I set sms alerts for these levels. When I get a text that price is at my level I have very specific price action that I observe.

I do my best to make sure that my realized risk is a fraction of my realized return. This helps make this emotionless as you begin to realize that trading is not about any one trade so much as years of consistent monthly returns. So I guess perspective steers me clear of lots of stupid things.
  • #6
  • Jul 11, 2011 9:57pm Jul 11, 2011 9:57pm
I used to overtrade, then I changed to longer TF
  • #7
  • Jul 11, 2011 10:13pm Jul 11, 2011 10:13pm
I don't have my game as together as you guys. That's why I'm really making an effort to write down my rules/plan. Come to think of it, this might be a good place to post it and get it shot up (proof read and forced to answer the hard questions). Now its time to dig up all the files I have about trade plans (samples, etc). I think the hardest part is deciding what suits best in terms of market, timeframe, set and forget, etc. well, here goes....
Tipster Trendlines - Trade from the chart
  • #8
  • Jul 11, 2011 10:14pm Jul 11, 2011 10:14pm
Quoting Tipster
How have you adapted to get it under control?

I'm writing a trading plan. To tell you the truth, I don't see this working, but when I think about it in comparison to my day job as a project manager, I can see how it would work and always have the barrell aimed in the right direction, so you could pull the trigger at the right time.

What help you (the reader...) get it under control?
Waiting for pullbacks instead of adding too much to a trade as it goes my way. Using stops away from market volatility which helps with the stop-hit & reenter thing. Basically patience and the knowledge which member 'PipEasy' has reiterated.. "You are never too late in forex. You are always too early" rings true.

I sum it up and say be a bull or bear, not a piig. lol
  • #9
  • Jul 11, 2011 10:15pm Jul 11, 2011 10:15pm
Quoting ptownboi
I am also prone to overtrading. I limit my trading to specific time frames on specific days of the week. I treat those rules as ironclad as the rules about stop losses and percent risked on each trade. I have a demo account that I use for fluff....experimenting, exploring, and doing the 'what ifs'. I never, ever, ever trade live on hours that violate the rules.

Don't know if that helps, but I think i have managed to get the overtrading under control. That plus I have checklist. I imagine myself in a cockpit doing a pre-flight checklist. As I get...
You know a post is for real when it says "As I get close to executing the order, I imagine the engine starting to rev up, and when I am ready for takeoff I actually verbally say "liftoff'."
Thanks for your honest input, it does help. Appeciated.
Tipster Trendlines - Trade from the chart
  • #10
  • Jul 11, 2011 10:16pm Jul 11, 2011 10:16pm
Quoting mfoste1
I used to overtrade, then I changed to longer TF
Do you still get the urge to jump in though? even at a larger time frame?
Tipster Trendlines - Trade from the chart
  • #11
  • Jul 11, 2011 10:17pm Jul 11, 2011 10:17pm
Quoting Giansar
I am trying to develop a scalping technique of my own and I've already noticed a dangerous pattern emerging. I trade during London and New York sessions (I am GMT+1) and frequently manage to make a decent profit until noon, which profit I kindly give back to the market usually with a nice interest by trading during afternoon hours
It doesn't bother me right now that much - as I am testing and building the strategy and want to trade as much as possible but once I consider it ready I will have to devise a way to curb this tendency of mine.
I think...
This makes sense, you're going to have to remember that though, if it takes to long to finalise the system you might forget about the time constraint. Set an alert to remeber!!
I have heard 10 pips a day consitentley is difficult. Its not the topic of the thread but I hope you succeed.
Tipster Trendlines - Trade from the chart
  • #12
  • Jul 11, 2011 10:21pm Jul 11, 2011 10:21pm
Quoting frankkn
I trade based on levels I determine long before price arrives there. I don't worry about over trading, as I set sms alerts for these levels. When I get a text that price is at my level I have very specific price action that I observe.

I do my best to make sure that my realized risk is a fraction of my realized return. This helps make this emotionless as you begin to realize that trading is not about any one trade so much as years of consistent monthly returns. So I guess perspective steers me clear of lots of stupid things.
I think thats one of the hard parts of trading, if your in it for excitment. The SMS alerts sounds like it works for you. Do you get the urge to sit and tinker, and if you do, do you ever find yourself thinking about putting in a quick trade with the rreal account? (...just a quick scalp here and there)
Tipster Trendlines - Trade from the chart
  • #13
  • Jul 11, 2011 10:30pm Jul 11, 2011 10:30pm
Here's a thread on the opposite, under trading. Middle gound is what we seek?

http://www.forexfactory.com/showthread.php?p=4770430
Tipster Trendlines - Trade from the chart
  • #14
  • Jul 11, 2011 11:16pm Jul 11, 2011 11:16pm
  •  Jey
  • | Joined Jun 2009 | Status: Market Slave-Overworked/Underpipped | 283 Posts
Only the brokers know how many accounts I have blown from over-trading. I have lost count. And I am still over-trading.
I have seen the enemy, and it is me.
  • #15
  • Jul 12, 2011 12:19am Jul 12, 2011 12:19am
Quoting Tipster
How have you adapted to get it under control?

I'm writing a trading plan. To tell you the truth, I don't see this working, but when I think about it in comparison to my day job as a project manager, I can see how it would work and always have the barrell aimed in the right direction, so you could pull the trigger at the right time.

What help you (the reader...) get it under control?
Overtrading generally happens when people have no idea about the probabilities and about portfolio correlations. You need to research a lot to get a handle of overtrading.

First you need to get to know how to beat the market / have a positive expectancy system. Then you need to know which pairs you can and should trade at the same time. As I mentioned on another thread. First I had 10 pairs which individually had spectacular results, but once I combined these 10 into one portfolio, I didn't get the best of everything, but the worst. In other words, the portfolio had deep drawdowns and almost no return to show for.
You have to find the right combination of pairs to outdo individual performances. Now I am with 3 pairs that boost each other's returns while limiting drawdown. This in turn means I now can tune up the lot-size.

Well, the message I wanna get across: people should stop trading until they have the stats on

 

  1. if their system actually produces profits on individual pairs
  2. which pairs to put into a portfolio to achieve better returns while limiting drawdown.


Once you got this, you have a great fundament for a trading plan which in turn will prevent you to overtrade (in time and pairs). Doing a trading plan just by feel and not on stats doesn't make sense (at least to me).

  • #16
  • Jul 12, 2011 1:27am Jul 12, 2011 1:27am
Quoting Tipster
I'm wondering how many traders find themselves over trading, and what are the techniques to kill the urge. I have found that running an EA helps me reduce my manual entries and wait for the great set-ups.

I started running an EA that uses the 4 hr TF, trades are open for a day to a couple of weeks, so when I open up my platform I'm in positions and can monitor them. I don't find myself tinkering either, I let it roll. I do confess though that overtrading has killed my account somewhat. The EA has built it back up to where I had my inital...

Overtrading is an emotional issue. When you close a couple good trades closed in a profit you feel unstoppable, and you want to trade more and more! STOP!!!

When you close couple trades in losses you feel like I need to open one more trade to get my money back. STOP!!!

If you feel like this, stop trading and do something else... TV, Facebook, Doughnuts doesn't really matter, just take a break.
  • #17
  • Jul 12, 2011 2:00am Jul 12, 2011 2:00am
Quoting josef
Overtrading is an emotional issue. When you close a couple good trades closed in a profit you feel unstoppable, and you want to trade more and more! STOP!!!
When you close couple trades in losses you feel like I need to open one more trade to get my money back. STOP!!!
Right on the money!
Get out of my head!!
  • #18
  • Jul 12, 2011 4:13am Jul 12, 2011 4:13am
Quoting Jey
Only the brokers know how many accounts I have blown from over-trading. I have lost count. And I am still over-trading.
What I do. Every single morning (about 30 minutes before the London session starts) I search for the pairs of the day. I do my technical analysis, News, and all the things a trader is suposed to do. Then, I put SOUND ALARMS on the price I want to trade.

For example, I identify a down trend in the EURO/Dollar. I make my analysis, such as Fibonacci, trendlines, highs and lows, round numbers and so on. Then, I identify a strong level of resistance in this pair. Then I put an alarm 10 or 15 pips bellow that price. I do it for every single pair. Then guess what...I go back to bed, with my computer on and the alarms. Sometimes I am sleeping and the price triggers the alert. Then I get up, and see. If I like what I see and there are no NEWS close to my entry point, I jump in. If I don't like what I see, I come back to bed to wait for the next sound alert.

Just one thing, I DON'T SLEEP ALL DAY LONG. hehe. I live in Brazil and when the London session opens, its 4 am here, so...

I used to overtrade, but this aproach helped me a lot, because now I only come to the computer when there is a real oportunity according to my system.

bye
  • #19
  • Jul 12, 2011 4:31am Jul 12, 2011 4:31am
Moving from M15 to H4 cured me.
  • #20
  • Edited 9:01am Jul 13, 2011 8:36am | Edited 9:01am
I use to have the opposite problem, undertrading. When I get one winning trade I'm becoming so sure that next trade will be a loss and I don't wanna throw away my previous win so I sometimes stop trading for days. I also use to undertrade after a loss, because I get the feeling the whole day is gonna fck up. Guess its all emotions. Being this extremely risk avert, don't know if it's an advantage or disadvantage. Time will tell.

But when I first started with trading I overtraded. I had just got a one time payment for a decent big account and was gonna rock with it. Now after I can see so many stupid trades I did with it, doubling up counter trend trades and all kind of crap. If you just have got some serious funding to your account I would advise to think a litle bit extra on the overtrading issue.
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