If you are struggling with the results of your trade, chances are you are in one of the following two situations:
  • You are opening too many deals.
  • You are not opening enough deals.
The second case isn't too bad. Talking about instructing someone to trade profitably, someone who is shy about trades or too scared to enter is much easier to train than someone who tends to gamble or is overly eager. when trading.

Unfortunately, chances are you are in the first.

Why? Because most people who are struggling with the results of their trades find it is because they are opening too many deals. They may be opening all the right deals, but they will certainly open a lot of wrong deals as well.

Solving this problem is not easy because there is no right solution for everyone. However, in this article, I will discuss with you a few points that will at least help you in the right direction to overcome the problem of overtrading.

Remember your default position

Transaction rules sometimes seem a bit counterintuitive. For example, what most people consider the number one trading rule: "protect your capital".

However, beginners often challenge this rule and ask, "Isn't my focus on making a profit?"

It seems strange to think that the way you protect capital is the first rule when we all know we need to risk capital to make a profit?

If the purpose is to protect capital, wouldn't it be better not to trade at all?

Well, in some cases it really gets better.

New traders can often get a bit nervous when they don't open a position. This is due to the misconception of their default position as a "trader".

They think: "If you are a trader, you should be trading, which means you should be in a trade."

It is this line of thought that will make new traders feel as if they are doing something wrong if they are not in their trading session.

But, this is really the exact opposite of what you should do.

In fact, a trader's default position is to do nothing. Yes, entering a trade is NOT the default position for a trader - NO entry is the default, or at least should be the default.

Remember rule number one: protect your capital. So, before moving on to the next point, I ask permission to be reminded again: Your default position as a trader is DO NOTHING!

Set traps, don't be a "pip hunter"!

The next important point concerns our default position.

If our best plan is to do nothing, then that also means we have to consider more carefully when looking for an entry point. However, this is the opposite of what traders are doing.

Because of the misconception that we need to be involved in trading in order to trade, most traders will become "hunters" of trades.

However, instead of chasing price movements, you need to set traps and wait for the price to come to you!

We will identify the key price levels for the trap, when the price falls, we execute a trade. But unfortunately, many new traders will do just the opposite. They want to trade now and they will adjust their key price thresholds until they get the correct confirmation to open a trade.

This means they try to force important price levels to match what they want to see. They're on the hunt for the entry point, instead of waiting for it to happen.

Since we only know one of the possible variations that are the exact critical price threshold, by forcing the trade you will often end up with something that looks like a key, but certainly not, important price threshold. is not!

Instead, the approach you should take is to trap the price. You should analyze the chart without letting yourself be influenced by the current position of the price. Mark all the important price thresholds where they should be - and then wait for the price to interact with them.

Just wait for the price to fall into your trap, don't chase it with a net in hand trying to catch every movement so you have a chance to enter the trade.

So, close the following 2 important points:
  1. Your default position as a trader is to do nothing.
  2. Wait for the price to interact with the price threshold you define, do not force the setup to match the current price just to have a chance to trade.
By focusing on these two key points, you will achieve a very common approach for any successful trader, which is to be proactive with your trading, rather than reacting to price movements.