12.10What is overtrading?
1What is it?
Overtrading is trading too often or too big, usually from boredom, excitement or trying to make back losses.
2Why does it exist?
Every trade has costs and risk. More trades rarely means more profit, and often means more loss.
3Practical use
Set a maximum number of trades per day or week; only trade setups written in your plan.
4Quick revision
- Too many or too big trades.
- Costs and mistakes multiply.
- Use limits.
5Knowledge check
Q1. Name a cause of overtrading.Show answer
Boredom, excitement, chasing losses.
Q2. Does more trading mean more profit?Show answer
Usually not.
Q3. One fix?Show answer
A maximum trades-per-day rule.