how to protect yourself from overtrading


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Well-Known Member
1. Have a cap on winning trades. For example.. If I win 2 trades in a row i stop trading for the day. It ensures protecting earned profits.

2. Have a cap on loosing trades. For example. If I loose 2 trades in a row, I stop trading for the day. It ensures protecting capital.

3. Have a cap on number of trades in a day. Whether loss or profit close for the day. For example.....I trade a maximum of 3 per day. It ensures that you do not over trade.

4. Have daily profit target and losses. If any of them is reached, stop for the day. It ensures that your greed and fear are under control.

5. Finally have a weekly and monthly targets and stop loss levels. If your weekly or monthly targets are met, do not trade further for the week or month. Similarly if your weekly or monthly losses are incurred, do not trade further for the week or month. It ensures you get refreshed by attending other things of the life. After all, trading is a part of life but life is not trading alone.:)
Over trading is very common for Intraday traders. We should avoid over trading by following these steps: -
#1 - After a Big Loss, Take a Break
#2 - Only Trade a Set Number of Stocks per Day
#3 - Set Profit and Loss Limits for the Day
#4 - Limit the Number of Setups you Trade
#5 - Limit How Long You Look At Filters
# 6 -Do not Trade All Day
# 7 - Execute Your Trading Plan

In Summary

Over trading can be one of the many things holding you back from achieving significant trading results.
You have to be honest with yourself and at all costs fight your impulsive side that wants to dictate terms to the market.
If there isn't a trade opportunity present, it's okay to just observe. Sometimes sitting in cash is not only the best move, but the only move.


Well-Known Member
Everyone gave golden advices.

Always remember that the most powerful tool you have in your trading arsenal is the ability to stop trading.

It might seem unproductive to "not" trade but if you want to save yourself from going insane then you shouldn't cross your limits. In the long term, always make sure that you give enough break for your mind. I recommend taking a break atleast one trading day every two weeks.

Huge profit? Stop trading.
Huge loss? Stop trading.
Not following your system? Take a break for few days.
Exhausted because you didn't sleep well? Then don't trade.
Trading for excitement? Then quit position and stop trading.

Similarly, screen time is also a myth. Spending a lot of time in your chair, in front of the computer is also counter-productive. I always close my laptop and take a break after every trade.


Protect yourself from overtrading with these strategies:
  1. Set clear goals.
  2. Create a trading plan.
  3. Use stop-loss orders.
  4. Establish trading rules.
  5. Monitor emotions.
  6. Keep a trading journal.
  7. Manage risk (1-2% per trade).
  8. Diversify your portfolio.
  9. Set realistic expectations.
  10. Take breaks.
  11. Seek professional guidance.
Set clear trading goals and stick to a predetermined trading plan, including limits on the number of trades per day or week. Regularly review your trades and maintain discipline to avoid impulsive decisions driven by emotions.

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