How to Stop Overtrading
The Day Traders Overtading Challenge
Overtrading…
Probably THE biggest problem for day traders.
The urge to always be involved is, well, just ingrained… it takes a while to beat it.
And sometimes you need to attack it from a different angle.
So here’s a challenge for you…
THE DAY TRADERS OVERTRADING CHALLENGE
So we’re not trying to ‘fix’ overtrading overnight, we’re not adding another rule, or forcing a new way to trade.
We’re using a series of tasks to create new high watermarks in areas of discipline to prove to yourself you can do it and build confidence.
How?
Using the Traders Mastermind Overtrading Challenge (I thought long and hard about that name.)
The rules are simple: you must complete each task in order.
Take as long as you need in between tasks, but you can’t go to the next until you’ve completed the first.
Got it?
Ok…here they are.
#1 Cease Fire
Sit in front of the screen and watch price without making a trade.
If you are a day trader, that means the whole day.
Bring up all your charts and broker screens as normal, but do not place a trade. Simple?
Yep… But if you have a tendency to overtrade, you’ll be seeing plays left, right, and centre.
You must not take any. Be strong.
#2 One Bullet
Once you have proven you can sit and do nothing, the next phase is to moderate your trading.
You are allowed one bullet, one trade per day.
No more, not even one borrowed from tomorrow on this “amazing setup that can’t fail.”
You choose when to take it, but you can only take one.
#3 Sniper Mode
Ok, so you’ve proven you can do nothing, proven you moderate your trading.
The final stage is to be sniper-like with limit orders only.
Set a limit at your level, attach a stop and take profit, then leave it alone.
Do this for a week and see how, when the ability to just market in and out on a whim is taken away from you, you think more clearly and wait for the right play.
Complete all those, and you’ve passed the challenge…
These are all designed to beat that little voice that encourages you to trade on every tiny movement. Prove to yourself you can control your actions.
Now, I can’t promise this will magically stop overtrading, but if you can do those three things, you definitely have the discipline in you to moderate those impulses…
And all it takes is a few months of reducing the impact of those impulsive trades to see a difference in your P&L.
If you’re an overtrader looking for a fix, try the challenge and let me know how you get on.