By Overtrading is one of the key reasons to lose money at trading. The novice trader tends to trade more as they think it will make them a millionaire. Even after reading many articles, they find it hard to solve the problem of overtrading. Due to this fact, many traders have quitted their options trading business. Overtrading doesn’t mean you have less knowledge about the market. It shows that you are failing to control your emotions. So, you need to take different steps to overcome this crisis.
Solving the problem of overtrading might take some time but if you read the tips in this article, you will give us a thumbs up. Let’s check the key steps which can solve the problem of overtrading.
Emotional stability
People usually overtrade due to insecurity. They always think that they are not earning enough and they will fail to support themselves or their family. Before you start your options trading journey, you should have a financial backup for your family. The backup should last for at least three months. Once you have such backup, you will never have to worry to pay your bills with your trading profits. So, you will not be under heavy stress and thus you can take the trades more systematically. Try to gain emotional stability as it will allow you to solve overtrading problems.
Choosing the bad brokers
People who trade with the bad brokers often participate in different trading programs. Most of the programs are designed to influence the traders to earn more money. As brokers make money from the spread, the more you trade, the better it becomes for their business. But if you chose to trade with the brokers like Saxo capital markets, you are not going to face such problems. A good broker will encourage you not to overtrade. Thus you will start focusing on high-quality trade executions.
As a rookie trader, you might not have the skills to choose the right broker. This is fine. You can do some research on the Forex broker and soon you will get a general idea about the premium broker. But if you want to avoid such hassle, you may start trading with Saxo.
Write down the rules
Without writing down the rules, you will never overcome the problem of overtrading. Every successful trader has a trading journal. They document every single action as it helps them to evaluate their trading performance. Being a novice trader, you might think you know everything about this market. But this is not all true. Try to know the following rules set by the professional trader and you will eventually better. But make sure the rules are not that complex to follow. Setting up complex rules can be harmful to your trading career. So, keep the rules simple at any cost.
Trade with low risk
Trading with high risk can induce the problem of overtrading. For instance, if you win or lose a big amount from a certain trade, you will get heavily excited. Either you will try to recover the loss or look for another bigger gain. Thus you will again take the trades. But if you trade with low risk, you will rarely face such a problem. Try to become a conservative trader and use the basic rules of investment. If possible limit the number of trades that you can execute per day. By doing so, you can significantly improve your trade execution process.
Think outside of the box
You don’t have to trade more to support your family. Start thinking outside of the box and look for high-quality trade signals. As you become more concerned about the quality trade execution, you will slowly ignore the low-quality trade signals. Thus, you will stop overtrading the market. But remember, it will take time to solve the problem of overtrading. If you expect to fix this problem within a day, you are wrong.
