It is said in Forex that many times you can earn by just sitting out of market , because time to time there are phases in which risk of loosing trades increases despite of good working strategy and its better to stay out and save your capital rather than increasing chances of loosing it.
There are many situations when retail trader or newbee should not trade , such as Before fundamental news , Interest Rate decisions , less liquid markets etc. but we will not be talking about those today because there are many succesful trading strategy specificaly for news trading & early hours based on daily candle close price which is most illiquid market during trading hours.
In this part we will be discussing today is '' Over Trading ''
- *-*-*- Over Trading -*-*-*-
After years of experience and reading at many articles available Online we have realised that concept of Overtrading is not completely explained & traders might think overtrading means taking too many of trades which is not completely correct.
As per our obervation taking any trade which doesnot meet your strategy can be dubbed as overtrading , because it show lack of self awareness & psychological inclination towards taking trade . Due to the fact that the emotion-inducing situations that occur in the market can sometimes be hard to detect and sometimes even over-whelming, we should manage that by sticking to our trading plan and trading strategies while we are away from the market and not in any trades.
Whenever you take a trade even without doing analysis there are 50 -50% chances of win /loss , now if you are taking informed & calculated decision of trading and chances are same , then its over trading.
If you are not making sure that odds of winning are in your favour & reasons of taking trades doesn't out number reasons of not taking it then you are over trading.
If market environment does not favour or support concept behind your trading strategy, STAY OUT !