Clicky

Overtrading

Posted By Robert On Tuesday, January 14th, 2014 With 0 Comments

A good hunter knows when it’s not worth pulling the trigger, or casting a fly. They might often come home empty handed but will always have a well stocked freezer.

Don’t trade for the sake of it. It’s like fly fishing: If the trout isn’t rising keenly enough for you to reckon on catching it first cast wait, or move on, for another. There’s thousands of them out there and the stock market, like trout fishing, is spoiled by over-trading. If people would only leave the damn thing alone sometimes there’d be richer pickings for all of us!

And like fly-fishing if you only “flog the water” you won’t learn or keep the skills required.

Personally I worry that I’d over-trade if I kept taking small losses, if for example a trade moved 2% against in the first few days of opening.

It’s quite similar to something a veteran trade I know used to say in his style of trading – if something doesn’t take off within a very short period of opening a trade, he is inclined to close the position. Perhaps there’s something to be said for the “if it’s not taking off, close it early” point of view in breakout trading.

Share Button

Leave a comment