How to Overcome the Bad Habit of Overtrading

Novice traders and experienced traders alike get into the bad habit of overtrading. Most of the time, the main causes that trigger overtrading are frustration, missed opportunities, losing trades and the desire to get-rich-quick. Other times, this costly habit gets in the way after we fail to act on a trade signal when the time is right.

The main issue is that these behavioral patterns occur without being able to control them. Most traders are aware of the destructive nature of overtrading and yet we find ourselves repeating the same mistake over and over again.

Now, you may ask:

“How do we break the bad habit of overtrading?”

The problem is that most traders are looking for answers in all the wrong places. There is no magic solution that will immediately solve your bad habits.

One of the techniques that worked very well with seasoned traders is to be aware of the consequences of overtrading. This in turn can inspire us to change.

The good news is that you can drop the bad habit of overtrading and make permanent changes in your trading activities. If you are very sensible about the negative consequences of your overtrading behavior then this awareness can put you into a different state of mind. 

You’ll never want to go into the bad habit of overtrading when you’re aware of the dire consequences it can inflict.

For instance, consider this analogy:

A surgeon performing an operation can’t let their frustration interfere with their work if something doesn’t go as planned. That awareness that the patient can die if they act on their frustration keeps them under control.

Some procedures don’t go well same as trading doesn’t go well all the time. However, the awareness of the consequences should prevent the trader to act on his frustration. When you know that overtrading stands between you and your trading success, you’ll think twice before you act again on your frustration.

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