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Thread: What is overtrading?

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    Default What is overtrading?

    What is overtrading?

    The meaning of the term excessive trade is embedded in the name of the term itself and refers to any area of ​​trade. This term is most widely used when trading on the stock exchange, the Forex market, in a business based on the production and sale of their goods.

    Overtrading on the exchange overtrading
    results are the reason traders fail, and very few people understand why they trade too much, and even fewer traders know how to stop this bad and costly habit. Excessive trade in business.
    tremendous speed:
    Suddenly, the business will need new resources, such as more staff, inventory, and perhaps even more office and warehouse space. Lack of resources can mean that contract execution disruptions begin. Without the execution of contracts, there will be no cash receipts as payment for the execution of the contract. Perhaps there will be lawsuits from customers. Problems in the case of excessive trading can snowball, and the joy of huge sales in the recent past will disappear instantly. Excessive trade is the reason for the bankruptcy of a large number of companies in Europe. Causes of Excessive Trading In business,
    one of the main reasons is the absence of a business plan or forecast in a business. Sometimes the situation is influenced by seasonal trends, sales of a certain product increase.
    There is no observance of money management on the exchange , fascination with micro contracts, round-the-clock monitoring of the trading terminal, and others.

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    Signs of overtrading
    Lack of cash flow. A warning sign is a situation in which you constantly have to regularly borrow money.
    Small profit. As profits diminish, it becomes more difficult to maintain a business, especially in a rapidly changing market.
    Excessive borrowing. Warn lenders about financial difficulties. Borrowing money to pay monthly bills and pay suppliers is certainly not practical.
    Loss of supplier support. During the initial phase of sales growth, most suppliers will be happy to provide additional resources to meet demand. However, delays in payment for deliveries will begin, and stocks will instantly decrease. The company will not have enough materials to continue working.
    Avoiding Excessive Trading
    Tracking cash flows is critical to maintaining a healthy business. Regular and realistic business forecasts need to be made, taking into account historical and competitor data. Systematic work to reduce costs, especially those costs that do not affect the production of goods and the supply of services.

    What to do?
    If the situation of excessive trade has already occurred, it is necessary to look for alternative methods of financing the business. Seek immediate advice from specialized business rescue funds to avoid bankruptcy or closure of your company.

    The concept of excessive trade is quite broad, in particular, we can talk about at least three areas:
    • excessive trade from a business point of view;
    • excessive trading from the point of view of an individual investor;
    • excessive trading from the point of view of a broker or manager.
    • Let's consider each of the options separately, since the meaning and principles are slightly different.

    Excessive trade from a business point of view.

    Excessive trade (from the company's point of view) is a situation when the company is too actively increasing the volume of sales of goods or services provided.

    We seem to be accustomed to the fact that the more you sell, the better, but this is not always the case, since there is always a certain limit, above which the efficiency decreases significantly, since there is a need for borrowed funds, which will cost more and more with each subsequent loan.


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    over-selling causes the following cycle :
    • a large volume of sales forces them to resort to borrowing to purchase components (goods, raw materials, etc.);
    • an increase in borrowing leads to an increase in interest expenses;
    • an increase in interest expenses affects net profit and working capital;
    • a decrease in the size of working capital makes it necessary to resort to additional borrowing;
    additional borrowing leads to an increase in interest expenses.
    As a result, the company will most likely experience perpetual problems with working capital and liquidity, and all profits generated by excessive trade, well, or a significant part of it, will go to cover debts to creditors.

    It is also worth noting that in the field of trade, excessive trade can be called situations when a point of sale cannot serve the current flow of customers.
    Overtrading from the perspective of an individual investor.

    Overtrading (for an investor) - Excessive (too frequent) buying or selling of financial instruments and assets.

    To simplify a little, excessive trading involves frequent and unsystematic market entry and exit. There are three common overtrading options:
    • Over trading - involves imitation of the actions of "successful" traders (the problem here is that when a deal is opened on someone else's advice, the trader has no opinion when to close it, and therefore he can do it sooner or later, which leads to excessive and unnecessary trading );
    • quick exit - assumes a quick closing of deals (I wanted 100 points of profit from the area, but closed at 10 because I was afraid, and then reopened, etc.);
    • fan trading - involves the chaotic purchase of a large number of assets (most often justified by diversification or some kind of expectations, but in fact it is a simple spray).
    As a result, due to excessive trading, the trader loses money where he shouldn't have lost it:
    • pays extra commissions;
    • opens unnecessary deals;
    • spends money due to spread, etc.

    Though trading on financial markets involves high risk, it can still generate extra income in case you apply the right approach. By choosing a reliable broker such as InstaForex you get access to the international financial markets and open your way towards financial independence. You can sign up here.

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    Hello dear .. Thank you, my brother, for this topic. Many people, especially beginners, face the problem of over-trading .. Excessive trading in the forex market means doing trading for very long times, which is not needed at all, as a newcomer trader trades. By opening his trading deal, then he never leaves his place, and instead of practicing his life normally, you find him monitoring trading screens all the time, until he gets up from sleep to reassure his trading deals, and sometimes, the obsession with trading may reach The limit of staying up all night and not sleeping except for a very few hours, and these are all with the aim of monitoring and following up the work of trading deals in the forex market, and after some time, you find that a trader in the forex market begins to retire from people, friends and family, closes himself, and does not practice his normal life in a way It is natural, but rather he dedicates his full time and energy to trading in the forex market, which leads him to excessive and unnecessary interference in making transactions in the forex market, and this behavior also afflicts him with tension, lack of focus, lack of deliberation and patience during the work Trading deals, although the forex market is known as the market for the long breath, and successful trading in the forex market does not come about through being patient and not rushing while managing your trades. This is what most professionals in the forex market constantly advise, as they have found, through their many years of experience in the world of trading in the foreign exchange market and the forex market, that when trading deals give enough time to work, you get better results, and thus achieve levels. Higher than profits, in contrast to what many believe that the more trading times and monitoring of deals, the greater the opportunity to achieve profits.
    I wish you all the best and success, dear

    Though trading on financial markets involves high risk, it can still generate extra income in case you apply the right approach. By choosing a reliable broker such as InstaForex you get access to the international financial markets and open your way towards financial independence. You can sign up here.


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    My dear friends, I hope you are healthy and happy. Over-trading Excessive trading in the forex market has a lot of harm, quite the opposite of what many traders, especially newcomers, think in the world of forex and foreign exchange trading. Screensavers to monitor the functioning of your trades.

    Though trading on financial markets involves high risk, it can still generate extra income in case you apply the right approach. By choosing a reliable broker such as InstaForex you get access to the international financial markets and open your way towards financial independence. You can sign up here.


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    Overtrading is known as over confidence, you can earn money in forex trading, bonus or balance of your accounts, you can use my idea and you become a professional traders , so you must look your equity and set your lots carefully and must concentrate and refresh mind to work, if you work with fresh mind, i can almost guaranteed to you are take profit in every lots every time or every day.

    Though trading on financial markets involves high risk, it can still generate extra income in case you apply the right approach. By choosing a reliable broker such as InstaForex you get access to the international financial markets and open your way towards financial independence. You can sign up here.


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    [SIZE="<font style="vertical-align: inherit;"><font style="vertical-align: inherit;">3</font></font>"]Excessive trading in the forex market means doing the trading for very long times, which is not needed at all, as the newcomer trader starts to open his trading deal, and then never leaves his place, and instead of practicing his life normally, you find him doing By monitoring trading screens all the time, he even gets up to sleep to check on his trading deals, and at times, the obsession with trading may reach the point of staying up all night and not sleeping except for a very few hours, and all of these are in order to monitor and follow up on trading transactions in the forex market, After some time, you find that the forex trader begins to retire from people, friends and family, closes himself, and does not practice his normal life normally, but rather dedicates all his time and energy to trading in the market.


    Forex, which drives him to excessive and unnecessary interference in making trading deals in the forex market, and this behavior also afflicts him with tension, lack of focus, impatience and patience while making trading deals, although the forex market is known as the market of long self, and that successful trading in The forex market does not come to you by being patient and not rushing while managing your trades. This is what most professionals in the forex market constantly advise, as they have found, through their many years of experience in the world of trading in the foreign exchange market and the forex market, that when trading deals give enough time to work, you get better results, and thus achieve levels. The higher the profits, in contrast to what many believe that the more trading times

    How to overcome the problem of overtrading?
    Overcoming the problem of over-trading is very easy, as you can completely eliminate this problem in just one step, which is by starting to use a trading plan or strategy, as developing a pre-developed trading plan or strategy would achieve Positive results to a large degree, when you use a plan or strategy, you study it yourself, and choose it according to your own situation and changing market conditions, then in this case you have completely eliminated the problem of over-trading, as what you have now to do is follow this plan, And what it contains in terms of orders and indications, and never deviate from them. This way, you can open your own trades
    [/SIZE]

    Though trading on financial markets involves high risk, it can still generate extra income in case you apply the right approach. By choosing a reliable broker such as InstaForex you get access to the international financial markets and open your way towards financial independence. You can sign up here.


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    Overtrading is the most common psychological problem that traders face. Overtrading is the combination of a fear of missing a move and boredom. The problem is that most traders enter the market with the desire to be rich overnight. Impossible promises of advertisers also influence them to do so. Most of the time, traders are not patient enough to wait for an opportunity to come. They enter the market before it is the right time and lose money as a result.

    Though trading on financial markets involves high risk, it can still generate extra income in case you apply the right approach. By choosing a reliable broker such as InstaForex you get access to the international financial markets and open your way towards financial independence. You can sign up here.


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    Default What Is Over Trading

    Overtrading alludes to the exorbitant purchasing and selling of stocks by either an intermediary or an individual broker. Both are completely various circumstances and have altogether different ramifications. An individual broker, regardless of whether working for themselves or utilized on an exchanging work area by a monetary firm, will have rules about how much danger they can take, including the number of exchanges are fitting for them to make.

    Whenever they have arrived at this cutoff, to keep exchanging is to do so shakily. While such conduct might be terrible for the dealer or awful for the firm, it isn't directed in any capacity by outside substances.

    Though trading on financial markets involves high risk, it can still generate extra income in case you apply the right approach. By choosing a reliable broker such as InstaForex you get access to the international financial markets and open your way towards financial independence. You can sign up here.


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    What is overtrading?
    overtrading literally means getting into a lot of trades in a given period of time. The number of trades you can expect in any given day, week, or month will depend on your trade frame, strategy, or tool. So, just because you're getting into a lot of business, doesn't mean you're moving forward.
    However, if you enter the trade with low expectations, you are moving forward, and you are entering the trade more than you need. This usually results in anxiety, frustration or trying to drive profits out of the market. Additional trades are unlikely to improve your profits, and in fact, are more likely to hurt your P&L.
    Overtrading can also take the form of trades with positions that are too large for your account or accumulate too many positions.
    Why you should avoid overtrading
    As a trader, you should always strive to increase your business expectations. This means an increase in the winning rate, or a reward for the risk-to-risk ratio of your trades.
    When you become frustrated, you will often enter the trade with modest or even negative expectations. This can happen when you are trying to make a loss or make a profit in a difficult market.
    Trade is cyclical. There will be periods of winning and periods of losing, and there will be periods and periods of many opportunities. The most effective way to handle these cycles is to save capital, energy and mental capacity for rewarding opportunities.
    Overturning occurs during lost periods and quiet periods. This can result not only in losses, but also in depleting your emotional, mental and physical energy. This means that when profitable times come, you will not be on your own. As a result, you probably miss it the most
    Signs you are overtrading
    Most traders have more access - the only difference is how much they do. Unless you wait for the perfect setup to come along, and then process them as if you didn't have the last 10 trades, you're probably moving on. If your last 10 trades or your account balance have an impact on the way you select and execute the next 10 trades, you probably will. Moving forward
    If you trade forcibly, open positions that do not fit your strategy or repeatedly break your trading rules, you are moving forward. If you find yourself changing strategies or constantly looking for new strategies, you are probably going even further.
    Another sign of overturning is that you find yourself intensely looking to trade towards the end of the day because you think you will have to bear the loss again. In fact, whenever you wait patiently for a trade to come to you, you probably will. Moving forward
    How to avoid overtrading
    By this stage, you are probably wondering how to stop overtrading. There are a few steps you can take to avoid or at the very least reduce overtrading. Here are three ideas to limit overtrading.
    Focus on the process
    The more mechanical your decision-making, the less room for emotion to crawl into these decisions. Even if your trading system is arbitrary, you can break it down step by step. The more steps you can take between hitting an idea and hitting the buy and sell button, the less likely you are to make a small trade.
    Take a break
    The more mechanical your decision-making, the less room for emotion to crawl into these decisions. Even if your trading system is arbitrary, you can break it down step by step. The more steps you can take between hitting an idea and hitting the buy and sell button, the less likely you are to make a small trade.
    Score your trades
    There will be winning periods, losing periods, and periods with very little trade for any trading strategy. Your P&L is not really a good idea of ​​how much you are trading through these cycles. One of the best ways to track your progress is to develop a way to score each trade. You can manage the expected win rate, risk ratio rewards, and how well you manage each trade. You can then maintain your average score over the last 50 trades. Regardless of whether you like P&L will be able to track your progress. If you try to improve your average score, your performance and P&L should ultimately benefit.

    Though trading on financial markets involves high risk, it can still generate extra income in case you apply the right approach. By choosing a reliable broker such as InstaForex you get access to the international financial markets and open your way towards financial independence. You can sign up here.

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    Greeting and good morning all memebrs i hope every one doing well today is friday and the last day of market trading after this market again open on monday and in two days every trader feel some rest
    dear mate you highlight such a valuable question that what is overtrading ?
    In my opinion and thoughts overtrading is the way of loss your profit and loss your capital becase some tike we make a good profit by trading amd our greed become in form and tell us to took a trade for more profit and we open a trade and it went into loss so this is the most dangerous effect of overtrading
    and the second efdect of over trading is it effect your health badly becase if you focous all the time in trading so it may damage your brain and cause your health badly so give maximum time in forex and avoid the over trading this is good for you and your health
    I hope evry one know very well about the casues of overtrading if any one have a further question then reply on this post i will help you to resolve your problem
    good luck

    Though trading on financial markets involves high risk, it can still generate extra income in case you apply the right approach. By choosing a reliable broker such as InstaForex you get access to the international financial markets and open your way towards financial independence. You can sign up here.


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    What is Over trading

    Overtrading is there that in which trainer opens too many trades at the same time power trading is very dangerous for the traders because it increase their is so much and traders can have very big losses in very small time over trading can give very big losses to the traders in very small time this happens when traders try to make too much money in very small time and mostly there trade go in loss tradersway should try to do small trading with small lots and they should try to make small profit when traders a try to make too much profit they do over trading and they take wrong decision which increase the chances of their losses
    Sohnikuri Trading Journal.
    Visit my Trading Journal.
    https://forum.mt5.com/showthread.php...rading-Journal


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