Entire libraries have been written and published on a subject of trading mistakes. Just about every trader with some experience has his own list of pitfalls. They can vary from under capitalization to over leveraging to lack of general market education. While the list can be very long, few mistakes make the list on consistent bases. One of them is overtrading.
It is easy to say that, but when exactly does overtrading happen and how do we define it? More importantly how do we recognize it and prevent it from happening? Not one simple answer will be applicable to all traders, as it can only be determined in light of persons' trading style.
Perhaps the easiest type of overtrading to recognize happens to traders who use clearly define systematic approach. In other words mechanical trading systems. If you are using software generated signals to trade or...
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May 16th, 2009, 09:27 AM
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