5 Simple Strategies to Help You Conquer Overtrading for Good

Overtrading is one of the biggest account killers new traders fall prone to. It even plagues experienced traders. We all must conquer overtrading once and for all!

You have to know when to stop, shut off the screens, and walk away. Our minds want to keep gaining and seeking out stimulation from the markets as long as they are open, but as any veteran trader will tell you, the longer you are at the screens placing trades, the lower your probability of success will be over time. If can conquer overtrading you set yourself up for longterm consistency

As a trader, you have to be calculated with your decisions and trades, and only trade when the time is right. You may want to trade the afternoon chop and try to make a quick buck, or may want to scrap your losses back from the open. Whatever the case may be, these tips below will help you avoid midday chop, avoid over-trading, and leave the desk every day with a clear mind.

Set a Routine For Yourself

Having a set daily routine like the one in the picture below is the big step to conquering over-trading. If you have a set routine and schedule, your mind will adapt to those habits and timelines and will automatically stop hunting for signals and trades that aren’t there past the morning session. There are so many variables that go into the trading day. When your looking at a stock your thinking about the markets, twitter, news, all these random indicators, and endless other variables. There is a huge cognitive overload that comes from all these variables. One thing we can do is have really solid routines that take some of the thinking out of the day for you and get you into a little bit more of a robot mode. For me I wake up and do the same stuff every morning! I hit the beach for a walk and catch the sunset. I face time my mother while I am walking out there. Ill then make facetimes to my employees that run my business to get an update on what we all need to do for the day. Here is a quick video on my morning routine! Then I come back home get that coffee turnt up!! Then I have a specific structure to how I look at the markets each morning. I start with the indices, then look at the pre-market gappers. I then sift through my stocks on the watchlist and start to mark out levels. From there I narrow all of it to my favorite six names and then I write down how I would like to attack these plays.

It will go into ‘break mode’ midday, and help you avoid the midday chop. Set a routine for yourself with strict timeframes and activities, and you will see that structure in your day will translate into more consistency and less over-trading. Over the years I have always lost profits in the mid day. There is just something there that doesnt jive with me! So most days if I hit my goal I am out by that time!

Take a Trading Break

Recognize when emotions are getting heated. Often it’s after a trading loss when new traders get emotional. This is when traders make the worse decisions. They start to revenge trade to make it back, force trades, and end up overtrading as they trade everything that moves to get their money back. A simple 5-10 minute break will allow you clear your head, start looking at the markets objectively again and prevent this death spiral. Taking breaks is the simplest way to conquer overtrading. Over the years I have had many students go on absolute tilt and blow up their accounts and sometimes their lives! Before you ever get to that point just walking away for a week or two can give you such clear perspective. I had once talked to a gentleman at the Traders4acause event. He told me that after he goes on a big run where its 7 figures plus he will often step away for months to reflect as often the biggest donwfalls come from the hubris after large profits. Utizling systematic trading breaks that are structured can supercharge your trading results!!

Have a Set Profit/Loss Parameters

Every day you should have profit and loss parameters in mind. If you make X on the day, or lose X on the day, you sell all or a majority of your positions, and move on with your day. If you hit it in the early morning, walk away from the screens happily knowing you did your job either way. If you lost, no problem, you managed risk. If you won, great! Move along. Knowing when to not trade is just as important as the trades you do take. One of the best things I have ever done for myself is to implement max loss per days via the broker. If your trading futures and using Ninja Trader for example they have numerous risk managment features right into the platform. You can also set up max sizes, loss and many other parameters right from the Tradovate platform. Call your broker and implement a max loss in your account. If you have a 50k account put it at something that is reasonable but still gives you a chance to trade. Most likely you will know your skill if its at 2k and you know once your down 2k the odds of coming back are slim then your max loss should be even tighter then that!

Limit Your Trades Per Stock

Limiting the number of times you trade one stock in a day will help you avoid the spin cycle. The spin cycle is when you trade one ticker over and over again. The more times you trade one stock, the worse your chances of making money on it. We call this “battling a stock.” It is literally the spin cycle of despair. You long at the top then sell on the dip. Then the stock dips and you short and it pops and you cover and go long. My biggest losses in my career were never on just 1 stock where I had entered and then held for a big loss. It was always in this spin cycle where I was trying to trade a stock and I kept re-entering it! I would be long then short then long then short. You start off with 100 dollar losses that turn to 200 that by the end of the day turn to 5000. They start adding up and you get bigger and bigger as the day goes on as your desperate to get your money back When a trader keeps trading a stock just so he can get a win on it. It becomes a trade based on ego instead of logic.

It is just the reality of the game of probability we play in. Limit yourself to trading MAX one stock 2 or 3 times per day. If you lost on it multiple ties, it means the setup is not clean or your forcing your entries.

Set a Timer: Avoid the Afternoon

This goes hand-in-hand with setting a routine for yourself. Set a timer where at that time it tells you to completely walk away from the screens at a certain point, or to stop looking for new opportunities. Usually, we recommend this to be anywhere from 11am until noon, right as the lull of the day hits and the volatility dries up.

Now, it is one thing to know how to avoid trading during certain times, but how do you know what setups to take when the time is right? How can you train yourself to pull the trigger on the right trades day in and day out?

That is where our boot camp comes in. Just take it from Islam here, one of our newest students who has been finding consistency in his trading results recently. He now knows exactly when to pull the trigger and why at certain times of the day, and can spot what to avoid from a mile away.

Another way to conquer overtrading is to limit your indicators. Often if your charts are too busy it comes a huge detriment to what you do. There are so many good indicators out there and they all work in some manner. Over the years I have used macd, RSI, volume profile, and many more. I have bought scripts online for special indicators. Tradingview, ninjatrader every market place that has indicators I have tried and bought them. It becomes overwhelming and your always looking for that holy grail to get you to the finish line. Get rid of most and focus on a few that work synergistically. It will clear your head in the heat of the moment so you can focus on price action alone. Here is an article I wrote on trading indicators check it out!

Overtrading kills more traders than bad setups. In the 60-Day Bootcamp, we focus on building strong trading habits, self-discipline, and accountability—so you stop overtrading and start winning

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🖋️ About the Author

Kunal Desai is the founder of Bulls on Wall Street, and a 20-year veteran trader who has mentored thousands through his 60-Day Trading Bootcamp. Known for his no-fluff approach, Kunal helps traders eliminate bad habits like overtrading and build the mindset required to win consistently.

📈 Struggling with overtrading?
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