Are You Bleeding Capital or Losing Profits? Overtrading May Be the Culprit

Overtrading can lead to a domino effect of issues, such as a lack of focus, frustration over losses, revenge trading, and, ultimately, account blow-ups. To prevent overtrading and the trading demons it creates, follow these steps:

Determine Your Trading Style

Your trading style should adapt to your schedule. For example, if you work during the day and can only trade in the evenings, consider swing trading. You might venture into short-term or day trading if you have spare time. Start with longer timeframes and gradually move into shorter-term trading as you gain experience.

Manage Risk

Risk is an inherent part of trading, but it can be managed. Split your trading capital in half, depositing one half with the exchange or broker and keeping the other half in reserve or another account. This safety net ensures you can only lose the amount deposited in the trading account, providing peace of mind.

Focus on Position Size, Entry, and Exit

As a new trader, concentrate on finding winning trades and aim for a 2:1 reward ratio to build confidence and gain market experience. Remember, you can only control your position size, entry, and exit. Allow yourself time for the trade to play out, and respect the profit you made.

Meditation can also help maintain focus and emotional stability during trading.


To avoid overtrading and its detrimental effects, determine your trading style, manage risk, and focus on the aspects of trading you can control. If you want to learn more, visit our trading platform to engage with other traders and access various tools, including stock screeners and profit/risk calculators.

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