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Old 11-05-2006, 06:25 AM
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Re: Problem with overtrading....

I think on average I see 2-3 good trades a day (excluding trendless days where ranges are too small to bother) and I'm a trend-follower. But I'm not a scalper so I can't say for you if you are or not. Scalpers trade more at high volume. My trades can be from 10 mins to an hour depending how trendy the market is. The trait of my trades are the winners stay in position longer than losers. The counter-trend trades (I do little of them) are quick ones since I determine they are scalping trades.

If you're overtrading, it may be because your entries are off (this may be from chasing) and your stops might be too tight, getting kicked out too prematurely so you enter. If you hold off from chasing, you'll start to see ideal entries (high reward/low risk trades) don't come that often.

You have another psychological weakness is that chasing is caused by greed or envy. You feel the market (and profits) are going without you. Need to curb this emotion. You need to see the downside (risks) from trade. You tend to see the profits but not the losses. Need to consider the losses first. Once you keep this in your head, you will start to trade less because you will be aware of the potential loss from the trade. To consider your loss, you need to set your stop loss order, it's a real loss if you take the trade and consider it gone if you take it. Mental stops are fine if you're an expert but I still make physical stops (I am and will always be a newbie!). Try it.

One other problem you may also have it not knowing where the trend is and range is (thus overtrading due to thinking every moment is an opportunity moment). Need to work on your chart reading or study and research the indicators you're using more. Test them out and find if they work in certain conditions and not in others.

Need to go back to paper-trading to work on your entries to prevent chasing. When you paper trading chasing, you'll see for youself how unprofitable it is and maybe this will open up your eyes to the problem.

Good luck.

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