How To Stop Overtrading

Overtrading is a problem that many day traders have. Overtrading is common, and frequently is a sign that the trader is not really thinking about the reason why they are making a trade. In fact, a major cause of overtrading is that the trader is trying to recoup earlier losses.

It is not uncommon for a day trader to undertake 20 trades in a trading session. Of course, this makes the broker very happy because each trade is a sure profit for the broker. Electronic daytrading creates an atmosphere that is extremely simple to execute trades. The market is moving minute to minute and all the trader needs to do is click the mouse in order to place the trade. The fact that it is so easy to trade in this matter frequently removes the trader from the thought process that motivates him/her for making the trade in the first place.

When a trader knows the reason that he/she is making the trade, it is likely that the trade will be better thought out, resulting in a higher probability that the trade will be profitable. Of course, thinking takes time, and during the time that it takes to consider why the trade makes sense, it prevents the haphazard click of the mouse.

Anyone who wants to learn how to day trade S&P emini futures needs to have as much information as possible in order to help determine where to place a trade. Trading is not easy to do because it is impossible to know the future with any degree of certainty. But the market does give off signals and a wise trader needs to know how to interpret the signals. Market prices seem to move erratically, but with enough information, trading S&P emini futures can be done with a greater assurance of success. An S&P emini futures trader who has Information about market signals and knows how to use them makes knowledgeable traders much more successful than others who use “seat of the pants” method. 

Some of the information that S&P emini futures traders should have are:

1. The Trend
2. The Intraday and / or Low
3. The Calculated Trading Zone via Taylor’s Book Method
4. The daily calculated range
5. Support and resistance levels
6. Stochastics
7. Candlestick patterns

These are some of the bits and pieces of information every trader needs to have in order to assess a trade. Of course, that is not to say that even with all this information a trade will work out, but having this knowledge puts the odds of success more on the trader’s side.

Having as much information as possible gives S&P emini day traders a big advantage over “seat of the pants” traders. It cannot be stressed enough that without learning as much as possible about the market, it is highly unlikely that a trader will succeed at making money by day trading S&P emini futures, much less in a trading career.

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