Overtrading is a serious problem for novice traders. Due to this problem, people in Hong King are losing too much money trading. So, what is overtrading? It the phenomena for which the traders are not able to execute the trades with managed risk. To ensure the safety of your trading capital, you must follow the standard rules and find high-quality trade setups. If you overtrade the market, it will not be possible to focus on quality. Giving more importance to high-frequency trade execution is not going to work. You must learn to give importance to quality trade execution and only then you will be able to succeed.
Over the period, there are few techniques used by the top traders to solve the problem of over-trading. After going through this article, you will learn some of the most amazing methods that can help you to solve the problem of overtrading.
Trade the daily time frame only
You must not trade the minute time frame or else the problem of overtrading will always remain. You have to focus on the daily or the weekly time frame. The daily time frame generates quality signals and you don’t have to stare at the trading platform 24 hours a day. Once you become good at analyzing the daily chart, you will realize, one good trade is enough to secure your monthly profit. Stop chasing the low-quality trades and focus on the daily chart. It might be boring to some of the traders in Hong Kong but it is the only way you can ensure consistency in the trading profession.
Trade a few instruments
Choosing tons of instruments in the Forex trading industry is another key reason to over trade the market. You need to trade selective instrument as it will keep the trading process much simpler and easier. Though you might not feel comfortable with the approach as you will think it will limit the profit, it is the only way by which you can improve and boost your trading performance. Things might be hard at the initial stage but once you learn to trade with discipline, you will know how it feels to become a professional trader.
Avoid using too many indicators
The use of too many indicators often leads to overtrading the market. You can’t progress in your life by using too many indicators. Indicators are considered as your helping tools. But if you rely too much on the indicators reading, it’s just a matter of time, you will start to lose money. Some of you may say, indicators are the best way to secure a big profit. For them, it is imperative to learn about the major chart patterns. After learning about the major chart pattern, you will realize indicators are nothing but helping tools. To secure a big profit, you must learn to trade the major chart pattern.
Follow a trading routine
The best way to solve the problem of overtrading is to use a trading routine. By using the trading routine, you will be able to take the trades at any market condition. But things will be done in a very organized way. You also need to follow a trading journal as it will keep things in track. You might feel that trading is a very complicated task but if you keep things in order, you will be able to change your life within a short period. Take the time to develop your routine but never break the rules as it can ruin your career. If you feel frustrated or bored, take a day off. No need to participate in this market when you are not feeling comfortable. Always try to trade with a relaxed mindset as it improves your productivity.