The will to work and the need to be patient
A trader can make many mistakes while acting in the markets. But one of the most crucial ones is Overtrading. Most beginners and sometimes even professionals fall for this trap.
Overtrading means that you trade in a situation where you shouldn’t trade much or even trade at all.
If there is a sideway-market, where prices neither want to rise or fall, some traders will feel the need to trade in order to earn money. But a high trading frequency can be pure poison to your account in this situation. If there is nothing to take out of the market, you will lose money. Even if you take a small win, you had hours of stressful trading for nearly nothing, but on the other side you did risk a lot.
And that’s a point to remember. There are times to trade and there are times to just watch.
You don’t have to trade everyday and you don’t have to trade the whole session.
To limit your own engagement is something, that’s hard to achieve. Usually we work when we sit down at our desks. We’ve learned, that we have to work for our money and that only the lazy ones sit around.
With this behaviour you can lose your objectivity in analysing the condition of the market and your goal will change from “making money” to “working, like a good employee”.
Even if success in trading is just achieved by doing zip and being patient, you aren’t blamed to sit around and stare out of the window, if a sideway-market occurs. If there is such a market just trade smaller positions and trade less at all. Minimize your risk!
Better use such days for other things, like doing stock research in the market, reading the Wall Street Journal, searching information about companies or branches which could be interesting in the near future. Or do some office work, that´s been sitting on your table for weeks. Whatever you do, try to relax, have patience and don’t work too much, if there is nothing to do in the market. Just wait until the market shows activity again.