Over trading?

[J_Commisso]

If you stop approaching her in a selfish manner on the micro frames, the "overtrading" tendencies will leave on their own accord.

In other words stop trying to constantly get something from her and she might actually give you something!

PEACE and good trading,
Commisso

 

[nitro]

Originally posted by Indie Cator
Many people seem to cite over trading as one of the big no no's for a new trader.

How do you define over trading? I don't mean in numbers, but qualitatively - what makes a trade one too many?

Thanks wise ones!

If I had ten setups where I had an edge, I would take those ten setups. If I had thousand setups where I had an edge, I would take those thousand setups...

I don't even understand the question when it is put in that context.

nitro

 

[LowestBid]

Originally posted by Runningbear
As a rule of thumb, if your commissions are more than 50% of your gross profit, you are probably overtrading.

Runningbear

That's a good point, RB. I tend to get nervous when commissions are more than 30% but the principal is the same: if you're taking money out of the market and giving it all to your broker, watch out.

 

[AAAintheBeltway]

Overtrading is trading for excitement or out of boredom or just because you have a hunch or because "they look a little weak here" or any of the other hundred and one rationalizations we use. It's trading because you are pissed you missed your set-up or left money on the table or got whipsawed.

 

[gotta_trade]

I'm a scalper. For the first 7 years of my career, my commissions would be about 25% of my gross. If I grossed $2000., commissions would be about $500.

Now with this market, decimalization, and for whatever reasons, it's not uncommon for my commissions to be 50-100% of my gross. Make $2000. spend $1000 in commissions.

If it 50% or less, I feel like I didn't really overtrade. If it's more than 50%, I overtraded.

When the market has forceful meaningful moves, my commissions will usually be at the 25% mark. Other than that I'm just churning and burning most of the time. Trying to catch a few moves that will make the difference in my P&L.

It's been tough, no easy money, but, I'm still making a living.

I would love to trade in a way where I can avoid all of this noise in the market,(especially because of decimals). I'm always working on that, but, until I figure out a way, I have to stick with what I know.