Overtrading is a barrier to achieve success in the currency exchange market, and most of the beginners drop out of theETF industry due to their overtrading policy. Because of greed, newbies tend to overtrade and loses all their money in the shortest time frame. Here we will discuss simple but effective strategies to overcome this barrier.
Ways to stop overtrading
1. Feel the overtrading tendency
The first step to stop overtrading is to identify whether we are practicing it or not. Overtrading defines the act of buying and selling the currencies continuously without providing any break, and this happens due to the lack of patience.
The best traders in Singapore keep themselves away from overtrading by maintaining a disciplined style with a proper businessstrategy. They believe quality is more valuable than quantity and executing repetitive action in the business will not provide the desired result. Expert Forex traders take 4 to 5 trading endeavors per month, and they value the good trade based on currency pairs.
Frequent business has a bad effect on investment because without getting a double profit, none can invest continuously. To avoid this, one must be fixed to his goal and control the emotional dilemma.
2. Weekend plan
A detailed weekend strategy saves the newbies from this kind of approach and helps him to build a proper money management goal. But before building a weekend plan, one must find out the potentials that he must achieve in a week. Try to use advanced platform like saxotrader as it will help you to organize your plan much more precisely.
Experts say that developing a strategy reduces their anxiety level to a great extent and plan to help them to gain profit in the future. According to FX professionals, trade is a “wait and see” approach that must be conducted with an effective prior plan, and this plan will restrict newbies from the bad tendency of entering more trades per day.
3. Daily time frame
Twenty-four hours in a day should be spent wisely so that investors can make themselves away from the tendency of trade uselessly. They should set a strategy that they will not trade in more than 20 currency pairs in 1 hour.
Another way to refrain ourselves from frequent trades is to counting the candlesticks in the graph chart. Trade is often not a good thing and maintaining a daily routine can help newbies to keep themselves away from unnecessary emotion.
4. Setting a weekly limit
A popular method to avoidthis approach is to set a weekly trade limit, which can be fixed to three or four setups. Once a targeted goal is filled up in a week, then the traders have to wait for the next week to begin. But one thing to consider that businessmen who are following the daily time frame should not follow the weekly limit.
The weekly limit helps to extend the performance in three ways. Those are it forces the newbies to plan their trades based on each count; control the greed of excessive profit and save from opening a trade in the first 24 hours.
5. Focusing on months or years
Trading is a long-time business, and massive success is not possibly maintaining a shorter time-frame. Many Forex traders approach the market, focusing on a “quick-rich” scheme and end up their business losing a huge amount of money. Professionals hold their financial instruments months after months and even years, refraining from entering trades too frequently to get the best result.
Overtrading is considered one of the deadly evil and costly habits by the Experts, and beginners fell into this trap, assuming the more they will trade, the more profit they will make. But they should change their perspective from the root and believe that less is more. A long-term plan can improve their trade performance by limiting the desires of overtrade because it often becomes so tough to deal with a sudden huge loss.