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

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What do you do to stop overtrading / manage trades?

  #19 (permalink)

Toronto Canada
Posts: 1 since Mar 2014
Thanks: 4 given, 1 received

It helps to have stalk zones according to a plan that has been proven to have a higher probability of success, on one key chart. The stalk zone need not be a well thought-out one, because it takes a lot of experience for that. They could be moving average cross-overs or even the benign MACD. This allows only one trade.
After you have taken it and closed it, just switch from Live to Sim or Paper trading and keep your itchy fingers busy, if you have to. But deliberately avoid doing it in the paper/sim too. Some platforms have an option to lock trading. Exercise this option. Switch back to live only when you see the market approaching the next stalk zone.
Always keep telling yourself that you are doing this to save your capital, and not to really make profits. The former is more important.
And as regards Stop losses, having clear stalk zones helps. Stops go clearly above the zone if you are selling; and below the zone if you are buying. Sometimes it helps to have a hard limit order stop than a trailing stop.

Hope this helps ...

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