What Would Experienced Traders Consider As EXCESSIVE TRADING....?

[nakachalet 10]

Specifically, if a trader pulled the trigger 30+ times in the opening hour....

 

would or could it be considered in your learned experiences as excessive and/or lunatic and/or moronic and/or suicidal.... and/or all the above combined together....?

 

here is the doc from his trade this morning on tuesday, august 30, 2011, USA east coast time zone....

 

what do you think traders....? :crap:

 

just how excessive is excessive in your experiences?

 

:haha: :haha:

[Tams 20]

Specifically, if a trader pulled the trigger 30+ times in the opening hour....

 

would or could it be considered in your learned experiences as excessive and/or lunatic and/or moronic and/or suicidal.... and/or all the above combined together....?

 

here is the doc from his trade this morning on tuesday, august 30, 2011, USA east coast time zone....

 

what do you think traders....?

 

just how excessive is excessive in your experiences? :

 

:

 

any trade that makes more than the commission,

and with the profit more than the drawdown,

is a good trade.

 

No good trades are excessive.

Edited August 31, 2011 by Tams

[brownsfan019 17]

I'm with Tams on this one. At one point I would have said that's crazy, but in the end, all that matters is whether $$$ came into your account or left. How a trader does it is up to them. If the trades make $$$ when it counts (real-time) that's all that matters. We've all seen plenty of these wonderful looking backtests, but it's gotta count when real money is on the line.

 

Obviously if trading a lot you'd want to get your commissions down as much as possible - through your broker and looking at leasing/buying a seat as well.

 

But even a $5 round trip charge on the ES is covered by making ONE tick. One ES tick = $12.50 so as long as your win/loss ratio works, you could make money going for 1 tick on the ES even at retail commissions. I don't recommend that, but the numbers could work.

[electroniclocal 10]

On the floor, we tried to hold our costs to less than 25% of profits. That's still my "rule of thimb" for a very active trader. Remember, its you taking the risk, not the broker.

 

Having said that, increasing the average trade profit is the road to better earnings.

 

I'm with Tams on this one. At one point I would have said that's crazy, but in the end, all that matters is whether $$$ came into your account or left. How a trader does it is up to them. If the trades make $$$ when it counts (real-time) that's all that matters. We've all seen plenty of these wonderful looking backtests, but it's gotta count when real money is on the line.

 

Obviously if trading a lot you'd want to get your commissions down as much as possible - through your broker and looking at leasing/buying a seat as well.

 

But even a $5 round trip charge on the ES is covered by making ONE tick. One ES tick = $12.50 so as long as your win/loss ratio works, you could make money going for 1 tick on the ES even at retail commissions. I don't recommend that, but the numbers could work.

[SIUYA 11]

agree with all of the above.

if there is profit in it then great, if its mad punting with no really strategy then its going to make the broker rich.

 

Now times have changed, but about 6-7 years ago just as high frequency trading was getting going, and option market volumes were picking up, one of the major clearing brokers let us in on a few numbers of their average clients.... They estimated that for every $1 made by the market making firms, about 45 cents went in costs to clearing firms, exchanges and brokers. this was the average, (and also did not necessarily mean the firms made money - but lets assume they did as a basic rule as they were market makers with the theoretical option pricing as their edge, based on what the guy told us). We at the time averaged about 20c cost for every $1 profit - I never wanted to be too high turnover.

So for high turn over market making firms thats what they were doing then....if you are worse than this with no edge it might be worth thinking again

[wrbtrader 10]

It's very simple...if these are trades that are not valid trade signals from your trading plan, it's overtrading (excessive). Therefore, it's never the number of trades you take. Thus, if you took 300 trades in the opening hour and all were valid trade signals...it's not overtrading (excessive). Just the same, if you only had 3 valid trade signals and you took 4 trades...that's overtrading (excessive). Yet, on the flip side, if you had 3 valid trade signals and you only traded 2 of those 3 valid trade signals, that's undertrading (not trading all trade signals while actively trading). Undertrading can be just as damaging as overtrading. For example, the missed trades could be the ones that would have made you profitable for the day.

 

With that said, there's a trader psychology issue. If you mentally can't handle taking any number of trades (e.g. 3, 5, 15, 50, 100 or whatever) regardless if they are valid trade signals or not...that too is overtrading (excessive). Simply, if you feel burnt out, blood pressure shot through the roof, emotionally ruined after a trading day regardless to the number of trades taken, that too is overtrading (excessive) and you really do need to quickly learn to control that to prevent having a short-lived trading career.

 

Specifically, if a trader pulled the trigger 30+ times in the opening hour....

 

would or could it be considered in your learned experiences as excessive and/or lunatic and/or moronic and/or suicidal.... and/or all the above combined together....?

 

here is the doc from his trade this morning on tuesday, august 30, 2011, USA east coast time zone....

 

what do you think traders....? :crap:

 

just how excessive is excessive in your experiences?

 

:haha: :haha:

[zdo 20]

OP,

Depends on that individual trader's true nature...

Equivalent question would be something like

"is that bird flying too often?"

 

zdo

 

ps great post, wrbtrader

[Tams 20]

OP,

Depends on that individual trader's true nature...

Equivalent question would be something like

"is that bird flying too often?"

 

zdo

 

ps great post, wrbtrader

 

if that bird got shot down, yes. :helloooo:

[zdo 20]

(new, good grief) Law of nature: Birds that fly just the right number of times never ever get shot down

[nakachalet 10]

It's very simple...if these are trades that are not valid trade signals from your trading plan, it's overtrading (excessive). Therefore, it's never the number of trades you take. Thus, if you took 300 trades in the opening hour and all were valid trade signals...it's not overtrading (excessive). Just the same, if you only had 3 valid trade signals and you took 4 trades...that's overtrading (excessive). Yet, on the flip side, if you had 3 valid trade signals and you only traded 2 of those 3 valid trade signals, that's undertrading (not trading all trade signals while actively trading). Undertrading can be just as damaging as overtrading. For example, the missed trades could be the ones that would have made you profitable for the day.

 

With that said, there's a trader psychology issue. If you mentally can't handle taking any number of trades (e.g. 3, 5, 15, 50, 100 or whatever) regardless if they are valid trade signals or not...that too is overtrading (excessive). Simply, if you feel burnt out, blood pressure shot through the roof, emotionally ruined after a trading day regardless to the number of trades taken, that too is overtrading (excessive) and you really do need to quickly learn to control that to prevent having a short-lived trading career.

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PaperClip nakachalet What Would Experienced Traders Consider As EXCESSIVE TRADING....? Yesterday, 09:13 AM

Tams Re: What Would Experienced Traders Consider As EXCESSIVE TRADING....? Yesterday, 09:36 AM

brownsfan019 Re: What Would Experienced Traders Consider As EXCESSIVE TRADING....? Yesterday, 11:28 AM

electroniclocal Re: What Would Experienced Traders Consider As EXCESSIVE TRADING....? Yesterday, 12:50 PM

SIUYA Re: What Would Experienced Traders Consider As EXCESSIVE TRADING....? Yesterday, 03:40 PM

wrbtrader Re: What Would Experienced Traders Consider As EXCESSIVE TRADING....? Yesterday, 06:22 PM

zdo Re: What Would Experienced Traders Consider As EXCESSIVE TRADING....? Yesterday, 07:58 PM

Tams Re: What Would Experienced Traders Consider As EXCESSIVE TRADING....? Yesterday, 08:10 PM

zdo Re: What Would Experienced Traders Consider As EXCESSIVE TRADING....? Yesterday, 09:32 PM

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I WOULD BE DELIGHTED TO LEARN FROM ALL OF YOU, GREAT TRADERS INDEED....

 

may i pay homage and tribute to all you great traders.... 3 cheers for you all.... :applaud: :applaud: :applaud:

 

and here is the rest of the pix which was left out from the original....

 

:haha: i truly admire all your insights and experiences.... may your trading days be overflowed with absurd profitability, joy, pleasure and happiness....

 

it is a little scary, when the green low 4-digit appears at the end of the first hour!

 

thx a mil y'al for taking your time, much appreciated and very much humbled by all your responses as well.

Edited September 1, 2011 by nakachalet
it is a little scary, when you noticed the green 4-digit at the end of the first hour!

[Tams 20]

trading is like playing golf by yourself

[MightyMouse 12]

30 trades is a lot if he was only supposed to take 20. It's not enough if he was supposed to take 40. If he was supposed to take the 30 trades, then he is awesome.

 

If he was not in his right mind, then even 1 was too many.

[Tradewinds 12]

There is also the issue of opportunity costs to your personal time. If an extra 2 hours of trading gets me an extra 50 dollars of profit after commissions, I might want to just go do something else with my time. In other words, I had the opportunity to do something else with that 2 hours, and I instead used it to trade, and only made an extra 50 dollars. I gained 50 dollars, but there was a cost to gaining that 50 dollars in time.

[DangerBoy 10]

The term excessive trading makes no sense what so ever.. .

 

Key factor in increasing profits in a positive expectancy game is to increase frequency of occurrence.. See how professional online poker players seek to maximize there edge by playing multiple simultaneous games, some of the best up to 20 - 25 games at a time..

 

Anyone who tells you, you are losing money because you are trading to much does not know what they are talking about, you are losing money because you have a crap system... in that instance trading less will only slow down your DD...

[ohmshontee 10]

Plan your trade(s) and Trade your plan. If u r trying to guess the direction of the IB (initial balance/first hour of trading, clicking away could be a sign of you don't know what u r doing. Do you have an addictive personality? I have found that if I have an idea and trade that idea, scalping the market in the direction of my idea helps me to book the profits. I traded today 3 instruments, never trading more than 3 contracts on each instrument at a time. At the end of the day I had 53 turns/$7338 gross. That's how I like to do it. And my trading was done before the "open" of the NYSE.

[nakachalet 10]

Plan your trade(s) and Trade your plan. If u r trying to guess the direction of the IB (initial balance/first hour of trading, clicking away could be a sign of you don't know what u r doing. Do you have an addictive personality? I have found that if I have an idea and trade that idea, scalping the market in the direction of my idea helps me to book the profits. I traded today 3 instruments, never trading more than 3 contracts on each instrument at a time. At the end of the day I had 53 turns/$7338 gross. That's how I like to do it. And my trading was done before the "open" of the NYSE.

 

ohmshontee

 

my utmost admiration and esteem for you and for anyone who have such unequalled will and determination and self control which most traders lack.... on the way to consistent profitability in their trading career.

 

3 cheers to you too. :missy:

 

shabbat shalom to you and everyone :applaud:

[Tradewinds 12]

I have found that if I have an idea and trade that idea, scalping the market in the direction of my idea helps me to book the profits.

 

I have the same style. I'm always looking to lock in profits at good opportunities.

[joshdance 10]

Anyone who tells you, you are losing money because you are trading to much does not know what they are talking about, you are losing money because you have a crap system... in that instance trading less will only slow down your DD...

 

For a completely mechanical "system," this is true. But when discretion comes into play, as it does for almost all traders, the lines between what is a "good" signal and forcing things becomes unclear. For example, when the mind enters the picture after a few losses, wanting to get the money back, one can easily be tempted to interpret what he sees as a good potential trade, even if it's not. This can lead to overtrading.

 

The type of "system" you are talking about sounds like the ones you buy for $395. If this is your trading experience, your above logic would make sense to you--but unfortunately does not work in the long term in the real world, and you are in for some eye opening.

[joshdance 10]

I would define "overtrading" as taking trades that are not well planned.

 

Doing this may yield profits sometimes, but in the long run I think it's bad because it demonstrates a lack of discipline, which is never rewarded in the market. It's kind of like lying--you can do it a few times and not get caught, but that can only encourage you to lie more, and soon enough a liar WILL get caught, probably in a much bigger lie than he ever dreamed he'd tell, and things will come crashing down.

 

Undertrading is not good, but it's not as bad as overtrading. You cannot lose money by not taking trades. This is a far better place to be in than being in trades you shouldn't be in, and actually losing money because of bad decisions. Sure, undertrading costs you potential money, and I think it's detrimental to the profit, but at least you walk away with your account still intact. The danger here would be compensating by then forcing trades which are not well planned because of fear of continuing to miss out--but again, this would be overtrading, resulting from undertrading.

[method 10]

Man, I keep having this exact same problem.

 

On Friday I made 3000 euros in one trade in like 2 hours but then at the end of the day I lost pretty much all of it in 3 trades in the same amount of time near the end of the session.

 

Sometimes you just need to know when to quit when you're ahead.

 

The biggest issue I have is not being able to cope with 'mistakes'. I use ' ' tags because sometimes what you perceive as mistakes aren't actually mistakes; they're just a part of doing business. Variance if you will.

 

This problem of overtrading usually strikes when I think I have made a 'mistake' or just made some bad trades.

 

Basically it's a state of mind that you need to be able to recognise and prevent, or subdue it when it appears.

 

It's pretty hard though, any advice?

 

The only thing I can think of is to try to try not to think about the money too much, and physically distancing myself from my trading platform by shutting it down, or the whole computer.

[DangerBoy 10]

I would define "overtrading" as taking trades that are not well planned.

 

 

Taking trades that are not part of a well defined plan already has a term, it's called GAMBLING.. if you are not able to identify your set ups like the back of your hand, you have no business trading..

 

"Overtrading" implies trading to often, likely coined by Trading Instructors and the like.. put simply there is no such thing as trading to much.. your use of the term only serves to confuse new traders but each to his own..

 

With regards to a mechanical system I don't quite understand the point you are trying to make.. a system that provides positive expectancy or an edge over a large number of trades is simply that, a system with an edge.. increasing the frequency of occurrence of this type of system by operating multiple systems or the same system on multiple uncorrelated markets will increase cumulative profits, whether it is completely mechanical/discretionary or a mix of the two has no bearing on the concept.

 

Undertrading is not good, but it's not as bad as overtrading.

 

Sigh... :crap:

[bobcollett 10]

Man, I keep having this exact same problem.

 

On Friday I made 3000 euros in one trade in like 2 hours but then at the end of the day I lost pretty much all of it in 3 trades in the same amount of time near the end of the session.

 

Sometimes you just need to know when to quit when you're ahead.

 

The biggest issue I have is not being able to cope with 'mistakes'. I use ' ' tags because sometimes what you perceive as mistakes aren't actually mistakes; they're just a part of doing business. Variance if you will.

 

This problem of overtrading usually strikes when I think I have made a 'mistake' or just made some bad trades.

 

Basically it's a state of mind that you need to be able to recognise and prevent, or subdue it when it appears.

 

It's pretty hard though, any advice?

 

The only thing I can think of is to try to try not to think about the money too much, and physically distancing myself from my trading platform by shutting it down, or the whole computer.

 

Dear method

I dont believe there is such a thing as over trading.

 

If the market is running your way, why stop?

 

Friday was the release of the Non Farm Payroll Report.............. USA

All world markets fell , big time

 

Were you long or short?

 

If you were long,you lost your $3000

This means you trade on technicals . You ignore the fundamentals.

Good luck

bobc

 

PS I wish you good will in the Rugby World Cup.

[joshdance 10]

With regards to a mechanical system I don't quite understand the point you are trying to make.. a system that provides positive expectancy or an edge over a large number of trades is simply that, a system with an edge.. increasing the frequency of occurrence of this type of system by operating multiple systems or the same system on multiple uncorrelated markets will increase cumulative profits, whether it is completely mechanical/discretionary or a mix of the two has no bearing on the concept.

 

Do you actually trade, or did you just read this from a book? I'm not trying to be facetious, I'm honestly asking. If you do, can you give an example of the type of "system" you are currently trading, and how long you have been trading it?

[gosu 10]

Dear method

* * *

Friday was the release of the Non Farm Payroll Report.............. USA

All world markets fell , big time

 

Were you long or short?

 

If you were long,you lost your $3000

This means you trade on technicals . You ignore the fundamentals.

* * *

 

What were the technicals that called for being long going into the report?

[DangerBoy 10]

Do you actually trade, or did you just read this from a book? I'm not trying to be facetious, I'm honestly asking. If you do, can you give an example of the type of "system" you are currently trading, and how long you have been trading it?

 

I have racked up my 10 000 hours yes.. the first 2000 sifting through allot of this "overtrading" type garbage.

 

I rarely bother with boards but once in a while I get bored and do and then wish I hadn't bothered..