Amazing Ways to Prevent Overtrading

what would you say if you are asked to name some of the traits of successful traders? You may say consistency, dedication, a well-engineered trading plan, or even money management. But do you know that another trade of successful traders is that they don’t overtrade? Even though they ace at winning trades, they still know their boundaries and limitations and dare not cross them. Because just like any other unethical trading, overtrading is also driven by emotions.

Now we know very well that doing anything that crosses a limit has its termination. Similarly, overtrade can terminate your skills as a trader and ruin you to ashes. So, the million-dollar question is what drives overtrading?

To answer, there are two varying reasons behind it.


When a trader is addicted to making money, he will try to go for more trades than he can bear to face. His greediness makes him take on more trades without any break ruthlessly. After failing a trade, many traders simply cannot accept their defeat and look for ways to make up for their loss. And to them, overtrading seems to be a golden opportunity to retrieve what they have lost so far.

Both the above-mentioned reasons for overtrading are interrelated and have the same outcome. Well, the outcome is not good at all. Many traders forget about what is right and what is wrong when they don’t know their boundaries. These are many caused due to psychological issues and stress which harm the trading career of an individual.

So, by now, you have already understood that it is really important to stay as far as possible from overtrading. And the investors who have relatively less experience, must know what is options trading or else they will keep on overtrading. They should be more focused on learning the basics rather than focusing on the trade setups.

Take a break

After you face loss, the first thing you should do is to shut down your device, close all the charts, and distance yourself from the trading market. You have just experienced a loss, so it is for the best that you don’t see what is going on in front of you. Because you are already in a vulnerable state and if you push yourself in this situation, it might not be the best for you. So, take some time off instead and try to divert your mind to something else, most preferably something you enjoy.

Set a trading limit

Traders who trade on daily basis may get many opportunities to trade. but to prevent the addiction of overtrading, you can set a limit to your daily trades. for example, you may choose not to trade more than 3 times per day. This will help you to focus more on the three trades you are executing and thus ensure the quality of your trading.

Set loss limits

It is completely natural to lose trades but it is not okay to let your loss go big. And to prevent that from happening, you can set a loss limit where a failing trade would stop and your losses will not turn bigger. When you manage to keep your losses small, it becomes easier to overcome that loss by one or two trades. Try to set your loss limit based on your previous trading results.

Have a particular trading time

Besides setting the numbers of trades per day, you can also fix a time at which you will execute all your trading works. Now, this is important to maintain a professional aura in trading as many traders work at home. This will help you get rid of indecision while trading. It is also important when you are looking for ways to maintain consistency in your trading.

Overtrading can be one of the many things that are preventing you from reaching your goal. That’s why it is really important, to be honest, and flexible in your trading career to get the highest profit in terms of the trading market.