Overtrading – the Deadly Sin

If you reach your daily goal and continue trading you may win some and you may lose some. After winning and losing you can end up where you were when you began the trading day. It is a good idea to have a target and stick to it. When you make x amount of profit for that day then you quit trading. The amount can be a percentage increase of your account or a set figure for that day. If you use an expert advisor most of them have an option to set a target. You should ensure this target reflects your daily goals.

There are many benefits to having a target and finishing for the day when you reach it. You should have a target for how much of an equity increase you will take for the day as well as an amount you are willing to lose for that particular day.

It takes strong mental discipline and controlled emotions to avoid overtrading. Many traders lose because they lack the discipline, concentration and focus. They are also driven by greed and fear which means they are more liable to overtrade. Forex robots can be used to automatically trade for you which helps for those who do not have the skill, knowledge, discipline or focus to trade manually.

Trading can be a stressful job if you let it be. Overtrading is a cause of this stress. Every day a trader should make a few trades at the most and have a plan of when to enter and exit these trades. It is very important to stick to the plan regardless of what happens. If the plan is not followed there is 95% chance the trader will fail.

Link to the Forex robot/expert advisor that I use and have had great success with so far http://www.forexluger.com. This is a non-affiliate link.