Many traders suffer from the problem of over-trading and over-managing, but in trading, only a few people are clear about why they over-trade, and only a handful know how to get rid of the bad habit of over-trading. Next, the editor will discuss with everyone how to solve various problems caused by over-trading or over-managing, and how to become a trader who trades less and profits more.

Over-trading VS Set and Forget

Over-trading is the Achilles' heel of most traders. In over-trading, there are many common situations. For example, constantly staring at orders; switching to a smaller time frame during trading; looking for information unrelated to the trading system from some social media, forums, or news websites to confirm the correctness of the trade; constantly changing stop-loss positions and profit targets; opening or closing positions without a plan; spending too much time checking some closed orders, etc.

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The "set and forget" method is completely opposite to the over-trading method. When you have completed the relevant analysis and built a position, set the stop-loss position and profit target, and then you don't have to worry about it anymore. You don't need to pay attention to how the price changes, just wait for the price to touch your profit target or stop-loss position. In this way, you no longer need to manually manage the trade frequently.

In fact, using the "set and forget" method can improve the level of trading. Moreover, when traders stop over-trading, their trading performance has improved. The main reason traders find it difficult to change the bad habit of over-trading is that they do not believe in their trading system. These traders only think about making money and have not verified the advantages of the trading system, nor do they have any trading rules.

Boring Market Watching and Poor Decision-Making

In trading, only by knowing what you are looking for can watching the market be a good thing. However, the market fluctuations are unpredictable, and it is difficult for us to know what will happen next. If we just browse the time frame and capture trading signals, it is doomed to fail.

When traders watch the market for a long time, they will feel bored to some extent. Boredom is a dangerous emotion, which can easily lead to poor trading decisions. To establish a better trading workflow and eliminate boredom, you can first analyze the market on Sunday every week and make a trading plan, determining the important price levels for the coming week. Next, traders need to set price alerts at important price levels, and when the price reaches the alert level, or when the price alert sounds, they can check the chart and assess whether they should enter the trade. In short, in order not to interfere with the trade, you can use the "set and forget" method for trading.

The "80/20 Rule" in Trading80% of sales revenue comes from 20% of customers, 80% of sales tasks are completed by 20% of salespeople, 80% of complaints come from 20% of customers, and 80% of wealth is owned by 20% of people, etc. These are all typical examples of the "Pareto Principle".

In trading, 80% of trading results also depend on your 20% of trading behaviors, but most traders cannot fully understand its meaning. In fact, the "Pareto Principle" mainly illustrates the importance of key factors, which determine the level of trading.

To grasp these key factors, first of all, traders need to create and manage a focus list, set price alerts at important points, record every trade, evaluate trades, and create rules and guidelines in trading strategies, etc.

Secondly, traders should not do things without value, nor should they do things that waste time. For example, observing time periods, price changes, and capturing trading signals without preparation; always staring at their own trade orders; looking for better trading methods in forums; arguing with other traders on social media; staring at the screen and making excessive trades, etc.

Control the desire for trading

Understanding the premise of using the trading system, and understanding when it has advantages and when it does not, is one of the prerequisites for doing well in trading. Traders must be good at choosing, and can only enter the market when the system tells you to enter. In fact, insisting on focusing on one trade for a week can also be very successful.

Trading is a pattern recognition game, it is a scanning process, and after entering the market, it cannot be redone, so traders need to minimize the possibility of making mistakes. Therefore, before preparing for a very promising trade, you can first list a checklist based on past experiences. This can prevent you from forgetting some details, make your decision clearer, and better grasp yourself.

In addition, traders should distinguish event priorities and stop excessive trading. When the market environment is very complex, staying away from the market is actually one of the key factors for outstanding performance. Traders should understand that "less trading, better trading", in other words, not trading is more important than trading.