Every trader needs knowledge about how to avoid overtrading in forex. Beginner traders are often faced with various problems, such as lack of capital, emotional trading, and also overtrading.

There are so many scenarios that can be referred to as overtrading (too many open positions, too much use of capital funds, too many trades in a short time, trading beyond risk limits, and so on).

In essence, overtrading is trading without a good strategy and management so that the trading business that is carried out tends to be like playing gambling.

Feeling too confident after one win, trading without a plan and inconsistent, tends to be lazy in opening and closing positions, desperate to open positions even though they have lost several times.

All of these include the characteristics of overtrading. Of course, if not addressed, traders can lose a lot of funds and not be able to trade long term, no matter even if you have joined the best forex broker.

Tips to Avoid Overtrading in Forex

Trading for profit cannot be done arbitrarily. There are several strategies and ways that you can do in particular to avoid overtrading, including the following:

1. Create a weekly trading plan.

The weekend is a great time to take a break from the market and make a trading plan for the week ahead as the forex market is closed. Review your trading results over the past week to see what strategies are right and what aren't.

Also understand the latest financial conditions and your trading capital to determine risk limits and profit targets for the week ahead. Also read the fundamental news released over the weekend and identify the influence of the news on price movements.

That way, you already have a stock of trading analysis for Monday so you can make wise trading decisions without being affected by emotions so you can avoid overtrading in forex.

2. Perform disciplined risk management.

No matter how good a trading plan is, it will not be useful without being followed by discipline in managing the risk of loss. Make sure all transactions that are still open already have a stop loss limit according to the amount of loss you can accept.

Also pay attention to the amount of equity or funds you have and determine what the maximum number of lots you can trade next. This is so that you do not rush to open as many positions as possible in subsequent transactions.

3. Avoid looking at the chart continuously

Too often looking at charts or charts can cause stress and emotions to become unstable. When the price moves up, buy immediately without paying attention to the trend and fundamental news.

This can cause big losses and lead to overtrading. So, pay attention to the chart as necessary, only when making analysis and when actively trading in the market to avoid overtrading in forex.

4. Focus on long term goals

Even if you make a weekly trading plan, don't be too ambitious to make big profits every week. You need to think for the long term-profit.

It's a good idea to set profit targets little by little but consistently every week and month, while continuing to sharpen your trading strategy and analysis.

The trap of overtrading is closely related to emotion management. Find out how to control emotions in forex trading here, and continue to train yourself to make wise trading decisions based on analysis and data to avoid overtrading.

The last thing is to always learn together with a trusted broker like Didimax Forex broker. Here, you can get knowledge about how a good trader can make a profit.

Always remember to practice the trading tips above so as not to get stuck with overtrading. Avoid overtrading in forex so you can get the profit you expect.