What do you do to stop overtrading / manage trades? | Psychology and Money Management


futures.io - futures trading strategies, market news, trading charts and platforms


Psychology and Money Management


This forum is where successful traders spend most of their time and where struggling traders never visit. The psychology and money management forum is where you learn to become a profitable day trader




 

What do you do to stop overtrading / manage trades?

  #7 (permalink)

Super Moderator
Sarasota FL
 
Trading Experience: Intermediate
Platform: NinjaTrader, Sierra Chart
Favorite Futures: ES, YM
 
bobwest's Avatar
 
Posts: 5,063 since Jan 2013
Thanks: 38,808 given, 17,127 received

I agree with the comments about having a plan for when things go wrong -- this seems obvious, but it isn't. A huge part of any plan should include when to pull the plug for the day, since there will be days when you just don't trade well, for whatever reasons.

When you start to overtrade, probably your mind (the rational part, anyway) goes slightly on tilt. This is exactly the wrong time to be doing more trades, and also the wrong time to be depending on your own judgement about whether to keep going to try to "make it all back."

Some very simple, totally mechanical rule that you don't let yourself break can save you. It could be as simple as "x number of losing trades," or "x number of losing trades in a row," or "x total loss for the day," or anything else that will just stop you from trading; no discussion, just stop.

Tomorrow will always have opportunities, as will the next day and the next. You can easily afford to miss any trades today if your objective results show that you are not trading well. This can be very hard to do, because you naturally want to make back your losses, and sometimes you can -- which makes things worse, actually, because it encourages bad behavior the next time, and it does not have a high likelihood of success.

Forcing yourself to have a pre-set "stop trading" point is like always having an emergency stop loss point in a trade, and it will stop the behavior, but only if you are willing to do it. You probably won't be all that willing when you have big losses, but you can force yourself to. Your account will thank you.

Sorry, I don't like this either . But I do practice it and it does work.

Bob.

Visit my futures io Trade Journal Reply With Quote
The following 7 users say Thank You to bobwest for this post: