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Risk Management Do not Overtrade

forex-overtrade.jpgOvertrading is a very serious problem and veteran traders learn to avoid it. In fact, one way to know if a trader is a mature professional is to know if that trader conquered the problem of overtrading.

The biggest problem with overtrading is that you don’t even know you’re doing it. You can overtrade by trading too many contracts or too much size, trading too often, attempting too many positions or sitting and staring at the screen all day.

This will occur if you don’t have a trading plan and good money management. One of the most important things to take away are set a plan, has your risk and money management plan in front of you and stick to it. If you have that plan and it doesn’t work, re-plan it, that’s why if you start small you can soon build up to be whatever trader you want to be.

Always put in equal amounts per trade. So many new traders come to the market thinking, I am going to pick 8 winners out of 10 and make all of this money. Well it is possible to pick more winners but still lose on the market. Why because of risk and money management.

 

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