Overtrading

Basics

Overtrading is taking more positions than your strategy actually calls for, so that activity replaces selectivity and costs pile up against a thinner and thinner edge.

Key facts

Two formsToo many trades, or too large

TriggerBoredom, tilt, or a need to be doing something

Hidden costSpread and commission on every extra trade

RelatedTilt, discipline, edge

Why it happens

Most overtrading is not about opportunity, it is about needing to be in the market. A quiet session feels like wasted time, so marginal setups start looking like real ones, and the bar for an entry quietly drops. Every one of those extra trades pays the spread and commission whether it wins or loses, so the edge has to clear a higher hurdle just to break even.

The antidote

The traders who do the least often keep the most, because a smaller number of high-quality trades pays the costs fewer times and keeps each decision fresh. Counting your trades against the setups your plan actually defines is usually enough to see the gap between trading your edge and trading your boredom.

Related terms

Tilt Discipline Edge

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