How to Avoid Over Trading

How to Avoid Over Trading

7 min read

Do you know how to avoid over trading? A successful trader is defined by the quality of the trades, not the number of trades. Over trading isn’t a problem reserved exclusively for new traders. In fact, it’s a problem both new and veteran traders face from time to time. From excitement, FOMO and even vengeance, the reasons are vast. One important point I must stress is that you shouldn’t confuse over-trading with active trading. Despite placing hundreds of trades, many active day traders remain profitable. But does that mean you should follow in their footsteps? Absolutely not lest you fall into the trap of overtrading.

Over trading happens when the amount and quality of your trades undermine your bottom line. In other words, you’re making too many trades with sub-par sets up along with irrational trading decisions.

All the while, you’re blowing through your account and paying dearly on commissions. Sounds fun, doesn’t it? Do you want to know how to avoid over trading?

A trading plan will help immensely. That’s stock trading wisdom right there. When you’ve written down a plan and know what you can and cannot trade, or what you should and shouldn’t trade, you be come a more targeted trader.

When you make a plan, you have to stick to it. That’s easier said than done, I’ll admit. So it may take some practice. But the more you practice, the more tactical you’ll be. And the more tactical you are, the better and more profitable you are.

Common Reasons for Over Trading

When you’re learning how to avoid over trading, and it takes practice, learn how to spot the reasons that it can happen. As a result, if you find yourself over trading, you can stop and take a breath and see if these reasons are why you feel like trading too much.


I’m not going to lie, trading is exciting and even more so for new traders. With so much to learn and the promise of large returns, it would be strange if you didn’t feel the excitement. It doesn’t take a rocket scientist to realize this can cause new traders to “jump the gun” and try to seize every opportunity in front of them.  

I liken this to FOMO or fear of missing out. From our social relationships, our intimate relationships, and even our career, FOMO can cause devastating effects. Beyond even that, it can have a significant impact on our trading practices. 


I’m guilty as charged of this one. Personally, I find that if I’ve been staring at the screen for a while I get tired, lazy and bored. Worse yet, if there are no prime setups, I’ll end up trading sub-prime setups and place trades that I normally wouldn’t. Basically, I’m just trading for the sake of trading.

Am I at Risk of Over Trading?

Do you know how to avoid over trading? If you can identify with any of the scenarios below, you just might be at risk for over trading. 

Have you ever:

  • Rushed into a trade without following your trading plan?
  • Rushed into a trade based on a hot tip?
  • Felt regret after buying?
  • Went against your trading plan and sold your positions because everyone else was jumping ship?
  • Thought trading is your solution to get rich quickly?
  • Spent way too much time scalping stocks until your eyes were burning and forgot to check the turkey in the oven?

How to Avoid Over Trading

  1. “Everyone’s doing it; it can’t be that bad.”
  2. “Just think of the money I could make…”
  3. “Sure, why not. What do I have to lose?”
  4. “If I don’t act now, I might miss out.”
  5. “I should have seen that coming.”
  6. “I’m so stupid; I can’t believe I did that.”
  7. “Someone must know something I don’t.”

If so, I hate to break it to you, but you need some help. So, moving onto our main topic of the show today, do you know how to avoid over trading? Patterns of over-trading will look different for every trader but there’s a few fundamentals key to any trader’s success. 

How to Avoid Over Trading by Getting Your Emotions Under Control

In the words of the Oracle of Ohamah, “If you cannot control your emotions, you cannot control your money.” Warren Buffett. So what does that mean with learning how to avoid over trading?

Without a doubt, managing your emotions is one of the critical traits of successful traders. Traders who face the same opportunity must trade the same; personal feelings can’t interfere

Luckily, Bullish Bears has one of the best approaches to managing your emotions. And that is through a solid trading plan. You’re probably familiar with the phrase: “Plan the trade and trade the plan for those of you around long enough.” A solid trading plan stops your emotions from clouding your judgement.

Know Your Exit Price Before You Enter the Trade

Yes, before you enter. 

Ahead of time, any profitable trader knows the price they’re willing to pay and sell. When the return is high enough and the chart indicators match their criteria, they place the trade. 

Take a look at unsuccessful traders. What do they have in common? Firstly, they enter trades without figuring out their profit and loss targets. Secondly, they have no idea what price they will sell at. Unfortunately, this causes emotions to take over when the stock starts to tank. When emotion is dictating trades, you’re well on your way to blowing up your brokerage account.

Set a Maximum Limit of Trades You’ll Take in a Day

This actually worked for me. In the past, I found myself staring at the computer for endless hours, getting bored, getting impatient and, well, overtrading. And the worst part is I lost money, lots of it. Quite frankly, I was sick to my stomach and, really, guilty of gambling. 

So how exactly did I fix this? The short answer is, I limited the number of trades I could take in a day. Every day I approached the market with the mindset that I could only take four trades; that’s it.

Indeed, it worked as it forced me to have crystal clear trade entry and exit criteria as I only had so many chances. 

For you, this number could be 100 trades a day; whatever the number is, just make sure you lock it down. Why don’t you try limiting your trades? If it worked for me, it could work for you.

Final Thoughts

Do you know how to avoid over trading? Undoubtedly, success in trading requires dedication, hard work, patience and the desire to learn. I suggest that if you want to learn how to avoid over trading, hone your trading skills and keep money in your pocket, sign up with Bullish Bears now. 

Personally, a key selling feature for me is their chat room and live screen share. During the screen share, the moderators go through the different stock picks and setups and explain why it’s a good stock to trade or not. 

Along the same lines, to hear and see how a trader analyzes a stock provides members with invaluable information, way more than a simple trade room shout out where everyone rushes in blind to buy.  

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