Overtrading is taking more trades than your strategy actually produces. It usually comes from boredom, frustration or the feeling that you have to 'do something' to reach the target. Each extra trade adds costs, risk and decisions made with less focus.
Are you overtrading?
- Your number of trades rises on losing days.
- You trade setups that are not in your written plan.
- Commissions and spreads take a noticeable share of your profits.
- Your best results came on days with fewer trades.
Why it hurts more in a challenge
Every trade risks a slice of the daily loss limit. Ten trades at 0.5% risk can, on a bad day, consume more than the 4% limit before you realise it. Fewer, better trades protect the limit and make the consistency rule easier to meet.
Set a daily maximum
- Count your trades for two weeks and see how many good setups really appear per day.
- Set a maximum slightly above that number, for example three trades per day.
- After the maximum, the session ends, even if you are in profit.
- Combine it with a two-loss stop.