Overtrading: Share Your lessons learned

[murray t turtle]

In this market, if you make one good trade, walk away for the day. If not, you will give it all back.

%%
Good shot.
I noticed its usually better for me to watch one, bear trends anyway ;
a logical exception, can be like SH, SSO........ which are so highly correlated its like heads + tails of same coin. But last hour, while it can have some good moves;
time is real limited for good move + can get real wild-LOL
Funny repeating bear rally pattern, i think;
LBR noted , his wife said never bring that $ 177 can of stinking sardines home/LOL

 

[Bad_Badness]

In this market, if you make one good trade, walk away for the day. If not, you will give it all back.

Respectfully I would strongly disagree.

The reasons are:
1) under trading can be as bad as overtrading.
2) the market does not care about your retail level P/L.
3) You will always give something back. It just needs to be less than what you take.
4) This is trading based on fear of losing. It is a weak position to be in and usually not profitable over the long run. It can lead to a host of other mistakes. Get over it.
5) "this market" makes little sense on when to take or not take trades. More appropriate is to adjust your system to accommodate the market at hand.


Simple back testing of strategies shows that if you limit your gains and then take "normal" losses you will end up adversely skewing your P/L over the long term.

Trade what the market offers, in term of sound setups. Don't over trade and don't under trade. After years it all smooths out.

 

[murray t turtle]

Respectfully I would strongly disagree.

The reasons are:
1) under trading can be as bad as overtrading.
2) the market does not care about your retail level P/L.
3) You will always give something back. It just needs to be less than what you take.
4) This is trading based on fear of losing. It is a weak position to be in and usually not profitable over the long run. It can lead to a host of other mistakes. Get over it.
5) "this market" makes little sense on when to take or not take trades. More appropriate is to adjust your system to accommodate the market at hand.

Simple back testing of strategies shows that if you limit your gains and then take "normal" losses you will end up adversely skewing your P/L over the long term.
Trade what the market offers, in term of sound setups. Don't over trade and don't under trade. After years it all smooths out.

%%
Good practical points;
but what if i like HI % profits, so i plan one good or best trade or investment for day??
[Actually in my example above i noted more than one profitable trade, but my plan points here still stands.]
I dont do many bonds or bond funds but some would say a bond trade or [bank saving$ which i partly like] is an'' under trade ''no matter the size. Like yours noted =''opportunity cost ''
So while i see your points,
no sir its not just based on fear. or weakness or lack of profit plans
I ground down an account years[to zero, goose egg] ago, daytrading, sorry i did not fear losses with planned limits.
Live + learn; i'm a lifelong learner.

 

[Bad_Badness]

Well then if High% profits is part of the plan, then that is the plan and you do what you need to do to make that plan work.

The issue is when you have a setup, and you decide to either skip it (under trade) or go outside of it (over trade). Once you do this, it is hard to tell if the plan is actually profitable, verus your P/L is just a "one off or the plan+extra rules".

Most people do not trade enough CONSISTENTLY to evaluate the strategy, as is. So they end up trashing about, which BTW, makes for an even more unbalance psychological environment. I.e. they make it harder than it needs to be.

The plan is sound or it is not. I would rather trade an unsound plan and take a loss, and know it is unsound. Verus, gyrate around, trying to make it work on the fly to make it profitable, then scale it up, and then stick to it, without the "extras", and take a scaled up loss.

 

[Leob]

) under trading can be as bad as overtrading.

That what fascinating about trading there is always 2 sides, and each side has pros and cons, now go figure what to do...

 

[SunTrader]

That what fascinating about trading there is always 2 sides, and each side has pros and cons, now go figure what to do...

You obviously need to re-read what Bad-Badness clearly posted .... about what to do and not do.

And murray t as well.

 

[murray t turtle]

Well then if High% profits is part of the plan, then that is the plan and you do what you need to do to make that plan work.

The issue is when you have a setup, and you decide to either skip it (under trade) or go outside of it (over trade). Once you do this, it is hard to tell if the plan is actually profitable, verus your P/L is just a "one off or the plan+extra rules".

Most people do not trade enough CONSISTENTLY to evaluate the strategy, as is. So they end up trashing about, which BTW, makes for an even more unbalance psychological environment. I.e. they make it harder than it needs to be.

The plan is sound or it is not. I would rather trade an unsound plan and take a loss, and know it is unsound. Verus, gyrate around, trying to make it work on the fly to make it profitable, then scale it up, and then stick to it, without the "extras", and take a scaled up loss.

%%
OK;
adding to the complexity, plenty of bear rallies make profits [or losses]on ice pick spikes/LOL
Funny now, not when its spike real time. Its fun when they hit your resting order on a gap up or gap down.
Those long bows can be real effective; I used Fred Bear recurve + Polar Bear Bow for deer + .30-06 with 2x7 scope[His real name,Fred Bear LOL]
Trading /investing is about the only business i know where people bragg about breaking even LOL.
Of course a break even is really a small loss unless one gets free home, free power, free food.
No wonder Paul Tudor Jones bought a farm + hunts ducks. Thanks for the post

 

[murray t turtle]

You obviously need to re-read what Bad-Badness clearly posted .... about what to do and not do.

And murray t as well.

%%
I did +looks like lot of us enjoy reading these posts;
but its my business+ planned .
Even though half a ton of pears wasnt planned + too big to handle , but that's life.
Good problem to have.
No wonder Paul Tudor Jones bought a farm + hunts ducks.................

 

[schizo]

I've never heard of people complain about overtrading when they're making money. It's only when they're losing money. In fact, when you're making money, it's not even called overtrading. Oh, no, it's called Winning Streak. So what exactly does "overtrading" mean?

People are fickle. Traders are especially fickle.

 

[maxinger]

If you are overtrading, you will continue to overtrade till the end of time.


If you are undertrading, you will continue to undertrade till the end of time.


If you are 'just-nice' trading,
you have managed to control your subconscious mind.
You have managed to center your mind all the time.
You are on the way to financial freedom.