Don't Over Trade- Make A Plan And Stick To It

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Over trading is one of the quickest ways to lose your trading account. What happens is in most cases you end up revenge trading if you get stopped out of a trade trying to make it back and end up losing because generally when you are in that mindset, you are wrong 95% of the time.

What Is A Revenge Trade?

A revenge trade is a trade where you end up getting stopped out and then you jump right back in because you still think you were correct and want to recoup the loss, only to get stopped out again. This habit is one that can be hard to break. Think of it like going to a casino. You put some money into the slot machine, and play down, hit a bit and then play it back down thinking it’s going to hit again, for the machine to just eat the rest of your money.

It ends up getting to you in a major psychological level and then you either end up quitting, or you end up putting more money in and going back for more pain. Don’t do it. Revenge is best served cold. And what I mean by that is that in the trading world is that it’s best to sit back, learn from what you did wrong, readjust your strategy, and go at it with a fresh mindset. If you don’t have a strategy, then STOP TRADING NOW, make a plan and stick to it.

Making A Trading Plan or Strategy

What that means is that if you tell yourself to only make X amount of trades a day, then that is all you are going to make, win or lose. No matter the results, there will always be areas to learn, so don’t worry if you are going out on a loss, if that is your last trade of the day, you are done.

If your trade strategy only allows you to make certain trades types based on certain technical rules, then stick to the plan! For instance, my goal is to make 3 trades a day. No more. If I make those 3 trades, I am done. Today for example, I was 1-2 on my 3 trades. The last trade was a revenge trade so that was certainly something that could have been avoided. I really wanted to go back in, but I stuck to my guns and stopped because it was my 3rd trade for the day.

I broke my strategy by breaking my rule of only taking longs when the 50 EMA is above the 200 EMA on the 5 Minute chart. I was silly and tried to short on a correction after pretty big pump and, well, that was the first loss of the day, the second came when I thought I was still right about the short and well, you already know the story, lol. First trade of the day was a solid win, so at least there is that. As long as I learn from my mistakes and stick to the plan, I will continue to improve.

Keep Learning Keep Trying

Don’t give up, even if you lose your wad. If you liquidate your trading account. Then take some time to evaluate what you are doing, try to learn what others are doing, and study the markets. I trade Bitcoin 70% of the time and Ethereum the other 30%. Both have the most liquidity in the decentralized exchange I trade in, plus they have the most volume overall. This also allows me to study only 2 assets which lets me get to know how they move. It took me a while bouncing in and out of the shitcoin casinos to learn that most altcoins move with Ethereum, and the entire altcoin market generally follows papa Bitcoin. So when BTC dominance is strong, it’s all Bitcoin, but when it’s altcoin season, I am trading ETH.

I can use this strategy to learn as much as I can about those 2 markets and be able to get a strategic advantage over the rest of the retail traders out there. That is what I love about the idea of being a trader. It’s you vs the world, but you don’t have to tell anyone or see anyone like in a traditional business. The other part is that I love the fact that no matter how long you have been trading, there is always something to learn and improve on.

Until next time my trader dudes and dudettes!

Be Cool, Be Real, and always Abide!