What do you do to stop overtrading / manage trades?
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What do you do to stop overtrading / manage trades?

Psychology and Money Management

Created June 20th, 2019 by muis2
Updated today by kareem40
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What do you do to stop overtrading / manage trades?

  #21 (permalink)
Legendary Market Wizard
Dallas, TX
Trading Experience: Intermediate
Platform: NT, TS
Broker/Data: IB, Oanda
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kareem40's Avatar
Posts: 653 since May 2010
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Best trading advice I was ever given

1) Trade very small ( micro ES and Forex)

2) Add only to winners

3) If one and two don't apply; don't trade.

Good luck,

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  #22 (permalink)
Trading Experience: Advanced
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Yeah, I guess the most important things is to set basic rules.

Set the time you trade.
Say... I'll trade between 8am to 9am. That's it! Don't care if all trades done so far was all winners, don't care if haven't done a single trade yet... only trade for 1 hour, that's it!

Set the number of losing trades in a row.
Say... if I lose 3 trades in a row, I'm done for the day. Don't care if only 5 minutes have passed since you started traded. 3 losers... you're out!

Set a stop and target automatically.
Say... I want to 6 tick stop and a 10 ticks target (it depends of the instrument you're trading) or something in line with your type of trading. Open your position, the strategy applies automatically and that's it! Don't move a muscle. Let it play.
If your stop gets hit, you read the market wrong. You need to improve the reading. If the target gets hit, you read the market correctly. Keep doing it.
Learn from each trade. Keep a record of the trades. With time you're going to recognize patterns.

Starting build your rules from the ground up.

And something I almost forgot to mention, trade an instrument that allows you time to learn this.
The new micros are a great tool for that, although the slippage can be a pain depending of the type of trading you do

If I become half a percent smarter each year, I'll be a genius by the time I die

Last edited by arnie; June 27th, 2019 at 03:17 PM. Reason: Forgot something
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  #23 (permalink)
Flagstaff, AZ USA!
Trading Experience: Beginner
Platform: WealthLab Pro
Favorite Futures: Stockes/ETFs
Posts: 1 since Apr 2012
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1) Trade only the morning session. Spend the rest of the day reviewing your trades and the market action.

2) "I've had a couple of frustrating weeks resulting in a big drawdowns in my account." This clearly indicates that you are trading too large or your account is too small. Trade 1 contract ONLY, until you are profitable. If only a few weeks of poor performance while trading one contract can result in "big drawdowns", stop trading, save up more money, and come back later.

3) You do not have an edge, so you are going to continue to lose money until you develop one. This means you should follow Steps 1 and 2 like a religious ceremony: Trade only the morning session every day, and review your trades for the rest of the day; trade very, very small.

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  #24 (permalink)
Eugene, OR. USA
Posts: 21 since Jun 2019
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Watching this video several times and even now on occasion has helped me quite a lot......
I have not purchased any of their stuff and you don't need to either.
So Now I look at the market, I have trade parameters and once I set the order with TP and SL I go do something else..... otherwise I start second guessing myself or just plain fiddling with my entry or position if it triggered.
Most of my trades last from a few seconds to maybe an hour sometimes a little more... But that's it.


Here is an example of what can be done with making a few bucks a day......
This will coincide with what the video talks about.

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Last edited by WmAFoster; June 28th, 2019 at 12:38 AM.
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  #25 (permalink)
Seattle WA/USA
Trading Experience: Intermediate
Platform: NinjaTrader 8
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Define your strategy and set loss limits

I have only about 6 setups that I trade and that by itself limits the number of trades available to me during the day because only so many will appear. I think if you define your strategy by concentrating only on those 3 or 4 patterns or setups that you are most successful with, you will automatically limit your trades.

Secondly, I have a maximum that I will risk per trade and I assume you do as well. My limit is 1% of my trading account. If my losses for a session hit 2x that amount I stop trading immediately. I then review the charts to see if I can figure out where the problem is because I am obviously out of sync with the market. If I can see how to correct the problem I will resume trading, if not I'm done for the day. Even if I do resume, if my losses hit 3x my per-trade risk, then I am absolutely done for the day. You should also have a weekly limit, maybe 5X, at which time you are done for the week. Take some time to study charts, read some trading books or something else that will improve your trading other than trading itself.

Never forget that even more important than winning trades and showing profits is that you must survive today in order to trade tomorrow. One other truism that I heard somewhere and I often have to repeat to myself: Trading is a marathon, not a sprint, plan on being in the game for the long haul.

Best of luck and happy trading!

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  #26 (permalink)
Wilmington Delaware
Posts: 12 since May 2019
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TraderTS View Post
I think you are trading too many products.

What works for me...
Read 'Trading in the Zone' by Mark Douglas
Zone into high probability trade setup
Allow only two bullets for each session on each product

... remember, not only let the trade setup comes but also wait for target(s) to hit, FIRST.

Good luck!

Yes this!! Trading in the zone is a great book, you have to have a probablistic mindset and act accordingly. What is your edge and are you able to apply it every time without error? You need a trading plan that spells out your entry, risk, and exit criteria. Use a mechanical system 1st. Once you enter a trade, the thinking has already been done. Trade your plan and plan the trade. Good trading!!

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  #27 (permalink)
Sydney, Australia
Trading Experience: None
Platform: NinjaTrader
Favorite Futures: European Minis
Posts: 10 since Sep 2018
Thanks: 1 given, 14 received

I have this problem (everything falls apart after a loss) and also the problem of being up on the day, and then giving back my winners from over-trading.

So now I have daily loss and profit limits.

If I lose 10 ticks (I trade Euro Stoxx) I'm done for the day, period. If I make at least 5 ticks, I'm done for the day. Usually if I'm on a good trade it'll run for more than 5 ticks, but if it turns around & I have to get out for 5, I'm good.

I get that I could be walking away from a bigger day. But my theory is, if I can get consistent at making 5 ticks / day trading 1 or 2 contracts and be happy with that, I can make 5 ticks / day trading 100 contracts, which is big money.

This helps me avoid that hugely frustrating feeling of being up 10 ticks within half an hour of sitting down to trade, and then giving it all back and ending up in the red on the day. I f*cking hate that.

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  #28 (permalink)
OC, California, USA
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Trade higher time frames

One thing that has helped me, and I'm surprised nobody or not that many people have mentioned it, is to trade on higher time frames. This will definitely slow you down! It will also reduce your trading costs (commission and slippage), subject you to less random noise, and requires less time staring at charts. Win win win!

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  #29 (permalink)
CANTON, ohio, usa
Posts: 1 since Apr 2019
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lose the battle to win the war

learn to accept losses. a loss is a loss. every day before you start the trading day, for each contract, already have what you are willing to risk known and how much money youre aiming for that day known. once it hits either point, stop right there. stick strictly to that first for some months until u master that discipline. then you can expand. because if u take a loss one day or 2, u can make up more greater profit days than your loss days. dont think that u will not have loss days so that u panic, or react when u have them. expect loss days. the greatest legendary traders have them. accept your loss days. stop trading for that day and start looking forward to your next trading day.its like throwing a interception or missing a shot. you have to immediately forget about it and just move on to the next play

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  #30 (permalink)
Sydney Australia
Trading Experience: Intermediate
Platform: TS
Favorite Futures: Currency futures
Posts: 2 since Oct 2011
Thanks: 2 given, 1 received

To avoid over trading you must write down entry rules and exit rules. The next step is simply to stick to them. If you have the feeling that you may break an entry rule I suggest that you turn off the computer.

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