Our advice to avoid overtrading in Forex

Forex trading is an activity that involves an iron discipline on the part of its practitioners. Sometimes they make mistakes, such as overtrading, which consists in placing excessive orders. This is something that must be avoided in order to avoid bankruptcy. How can we avoid falling into this trap?

Overtrading: too many trades kills trade

Overtrading simply involves excessive trading, placing too many orders. This situation occurs most often when the trader shows presumption. When he thinks he’s in control. He is so confident that he is too playful in a series of trades, practically ignoring the risks involved in his behaviour. His only motivation is to earn the most money in the shortest possible time. He then ignores that this is the best way to lose as much as possible… How can we avoid this end?

Tips for not falling into overtrading

To avoid overtrading, it is essential to set up a trading strategy and stick to it, no matter what happens. Impulse has no place in decision-making. First, a comprehensive plan must be put in place that includes a trading technique and a money management method (capital management). The trader thus creates a trading system that is similar to him and that corresponds to his objectives and the risks he is willing to take. It thus defines the conditions under which it will place an order, exit the market or take a position. Nothing is done randomly.


Precisely, it is essential to monitor and analyse market developments assiduously. In particular, it is better to rely on currency pairs with clear trends. Then, it is necessary to set rules in relation to market fluctuations: under what conditions will a position be taken? What are the incident criteria to enter the market?

Finally, it is strongly recommended to have a trading logbook in which all trading activities are recorded. Thanks to this monitoring, it is possible to analyse the various decisions taken and improve trading behaviour. We can identify the conditions under which trades are often successful, thus having the opportunity to optimize trading.

In any case, it is important to keep in mind that it is not just a question of earning as much money as possible. It is better to focus first on preserving the capital invested. And even if the conditions seem favourable, but they do not correspond to the trading rules we have set for ourselves, it is better to stay back and avoid overtrading. If you are a beginner in Forex we offer you a special folder to teach you how to trade in the foreign exchange market. Feel free to consult it regularly to discover new tips.