Overtrading?

A trading lesson from Deron Wagner:

Ten years ago, when I began my career as a professional trader, I was of the mistaken belief that I needed to be active in the market every day, or else I was being lazy and not doing my job. However, I eventually learned this was far from the truth. On the contrary, I discovered the most successful traders were actually out of the markets more than they were in the markets. Rather than being in the markets every day, I learned the most profitable traders laid low when nothing was going on, while being aggressive when trading conditions were ideal. My personal experience has proven this to be true. Over the course of my trading career, many of my biggest losing months have been the result of overtrading during low volume, choppy markets, not the result of suffering big losses in a bear market. Rather than adhering to our usual format of sharing individual trade setups we like, we thought new traders may appreciate this brief, yet very important psychology lesson. Similarly, experienced traders may appreciate a reminder on the dangers of overtrading when there’s not much going on.

If your recent trading results have been disappointing, ask yourself if you’ve been forcing too many mediocre trades, rather than patiently waiting for the perfect setups to come your way.

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Focus on catching the meat of the moves in the stock market, not every little nook and cranny. Above all, remember to “trade what you see, not what you think!”