Are You a Victim of Forex Overtrading?

With Forex markets open 24 hours per day, 5 days per week - there are hundreds of possible moments that a trade could be entered. Whether they occur during the day (whilst you're awake) - or in the evening when you are asleep... there's no doubt that many occur.

After all, people all around the world are trading currencies each and every second, so all of those different decisions have to be made at some point.

There has been a lot of focus recently on the downsides of the Forex market. Unlike stocks and bonds which have market hours of only 6 to 8 hours per day, Forex is an all day sport. This means that some people find themselves staying up till 4am in the morning, simply to get that perfect trade entered or finished. Additionally, some people try to cram 10 to 20 trades in to a single day to maximize profits. But is this a clever thing to do? Or is there a chance that it can backfire and turn your potential profits in to losses?

Overtrading is Bad for the Mind

If there was a single reason why we should all try to avoid overtrading, it would be because overtrading Forex specifically is bad for the mind. Because markets can move so very quickly, if you are regularly entering 10 to 20 trades every day - the demands on the mind are huge.

Pressure and stress can quickly build up. Some people thrive on this trading environment, however for others; it might be what breaks them. Additionally, with greater pressure comes a more intense need to profit - which can lead to silly decisions, and poor logic.

Addicted To Trading

There is a difference between overtrading and being addicted to trading. Arguably, both are as bad as each other. To be more specific, overtrading is someone who places simply too many trades each and every day.

Being addicted to trading would be seen in someone who sat in front of their monitor for 12 hours each day, simply watching every precise movement of a currency pair. They would hope and pray that a pair would move their way, and would follow that pair with a hawk's eye until the correct outcome appeared.

If you are overtrading - have a careful think about the reasons why you are involved in the market, and what trading strategy you are using. After all, the more you trade, the more your broker will charge you in commission... which can become extremely costly in the long run.