How do you guys deal with overtrading?

General Discussions
1

Honestly curious what other people do here. I trade MES and my biggest problem has never been finding entries — it’s stopping. I’ll have a solid morning, hit my number, and then sit there staring at the chart until I talk myself into one more trade. Every time.

I tried everything — journaling, writing rules on paper, even told my wife to yell at me if she saw NinjaTrader open after lunch. None of it worked because in the moment I’d just ignore it all.

Eventually I got frustrated enough to code something. I’m a developer so I made an indicator that literally disables my Chart Trader buttons when I break my own rules. Time window closes, buttons go dark. Hit my max trades, done. Losing streak, forced cooldown. I even had to make it survive restarts because I caught myself restarting NT8 to get around it, which was a fun moment of self-awareness.

It’s been on my charts for months and honestly it’s the only thing that’s worked for me. But really I’m just curious how everyone else handles this. Broker-side limits? Pure willpower? Something else?

2

I wrote my Indicator so that it returns all of the same entries and exits based on Historical data as it would in real time. I output everything into a spreadsheet and did a thorough analysis on it.

With a sample size of thousands, taken over several months, what I found was that at different times of the day, my Win/Loss Ratio and Average Trade Value fluctuate wildly. So, what I did was write another Indicator that flags me when I am inside or outside of the high value “subsessions,” and I only trade within those windows.

The last window closes at 06:54 Pacific Time. After that, I shut down the computer and get on with the rest of my day.

I get between 2 and 4 entries per day, on average, and I don’t even look at my account’s value until after the last subsession. I keep a mental total, but I make sure not to click the Accounts tab until after I’ve already decided I’m done.

To me, the data are sacrosact. If I trade anything outside of what I know grants me a statistical edge, that’s gambling. That’s like the house hitting at 18. And since I wrote the rules and produced all of the data myself, I have no reason not to trust it.

Besides, I kind of like making a week’s pay before 7 in the morning. It feels like I’m living my whole life on vacation. :smiling_face_with_sunglasses:

1 Like
3

Maybe use your app you are trying to sell? :joy:

4

That’s a solid approach — using your own data to define the windows and then sticking to them takes serious discipline. The subsession idea is interesting, I basically hardcoded the same concept into my tool because I couldn’t trust myself to actually close the chart after the window. The fact that you can just walk away at 06:54 without needing anything to force you is impressive honestly.

5

Fair point — I am selling it, not going to pretend otherwise. But the question was genuine too. I built it because I had the problem first and coding was my way of solving it. Curious how other people handle it without a tool though, which is why I asked. Also maybe i can get more ideas for features.

6

There really isn’t any such thing as “overtrading.” That would be like the dealer at a Blackjack table refusing to deal another hand to a player who just lost.

You just have to have a really solid understanding of your edge, from a statistical standpoint. You have to know your rules, backwards and forwards, inside and out, understand why you follow them, and why you lose when you don’t.

There have been many times when I saw an entry forming in one of the red zones, and there is always that temptation, but I just remember that in that zone my W/L is below 50 and I wait.

Yes, it takes discipline, but you develop that as you refine your edge. And, eventually, you reach that point where you just know that, “if I do this I win. If I do that, I lose.”

To me, the hardest thing to master was not overtrading, but staying in winning trades. THAT was when the dam broke. Once I figured out that a couple of losing trades could be wiped out with one solid winner, which most of them are, I finally felt things really start to gain momentum.

7

That’s my personal experience too.
Daytrading experience for over 20 years confirmed that you can be consistently profitable, and still confirms it every day.
Your statistical analysis of a big amount of trades, and having clear trading rules, tells you what to do to be profitable.
If you take all the trades, following your rules, you can never overtrade.

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8

Have you tried looking over your trades to see if they fit your entry criteria? Are they all a+ setups and trades?

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9

This is one of the fundamental debates. Rules vs. gut instinct/experience.

I’ve seen traders on YouTube who can just look at a chart and know exactly what it’s going to do next just by looking at it and seeing what it’s doing right now. And they’re always right!

It seems to me that any trader who does this for a long time should reach that point. I have already even found myself looking at a chart and thinking, “it’s about to drop a lot,” and then watched as it did exactly that.

I think the answer is that the market, at its most fundamental level, and despite appearances, is not random. By that, I mean that things happen in the market because of what’s happening in the market. It’s like watching traffic at an intersection. Sometimes cars run red lights, but generally, you know that when the light turns yellow and then red, cars will slow down and stop. In the market, what’s random is how often the light turns red, but when the red light comes on you can predict what will happen with your edge’s statistical degree of certainty.

And, just like the dealer at the Blackjack table, you don’t necessarily care whether the player just busted or got two Blackjacks on a split hand, you know that your edge is X good, and so you deal the next hand.

Pareto’s Law says that 80% of the profits come from 20% of the trades. You don’t know going in whether the next trade is going to be an 80-percenter or a 20-percenter. But, if you know what your average trade is worth, it doesn’t matter. Eight 5-tick winners and two 50-tick winners average out to 14 ticks per trade. That’s $175. Even at just two trades per day, that’s a pretty decent living.

So, define your rules, generate a bunch of sample data, analyze it throughly and use that analysis to refine your edge (meaning you adjust your rules to maximize profitability), and then just play by your own rules.

Although, the OP’s question was “how do you stop yourself from breaking your own rules?” Have we answered that yet?

10

Yes I have… use the app OP is selling.

1 Like
11

Those wouldn’t be your rules, though. They’d be his.

12

I’m sure you can set “your rules”. Why would anyone want to purchase something that disables trading based on their rules?

13

Honestly? No. That was the problem. Most of the overtrades weren’t A+ setups at all — they were me convincing myself something was there because I wanted to be in a trade. The good setups were usually in the first couple hours. Everything after that was me forcing it.

14

Same reason people use a kitchen timer instead of just watching the clock — you know what the rule is, but in the moment you get distracted and forget. Or in trading’s case, you remember the rule and choose to ignore it because “this setup is different.” The tool just removes that negotiation with yourself.

15

This is exactly what I was saying in my first reply.

After I analyzed all of the data and realized that certain windows of time produce a WAAAYYYY higher probability of a losing trade, it just stopped making sense to trade during those times.

What I finally had to do to eliminate my tendency to enter or exit when I shouldn’t was to literally remove all references to current price from my charts. I removed the Price Marker, I removed the current P/L readout from Chart Trader, and I even made the candles themselves invisible.

Now, all that I see on my charts are the lines that tell me where my entries should be when my edge shows up, where my TPs should be based on the Average Trade Value of my edge, and where my Trailing Stop would be. I have red and green backgrounds to tell me if I’m in a Go window or a Stop one (with a large, bold “STOP” in the corner of the screen during the latter), and I actually do still have two trend lines, but those are based on a higher time frame, so they don’t update often. Oh, and I do still have the previous day’s High and Low and the Opening 5-minute Range lines on there, too, but those don’t really factor into my current strategy. I just keep them there because it avoids the chart looking totally blank, and I wrote that Indicator myself - one of the first ones that I ever did - so there is some sentimental value, as well. Otherwise, my chart is literally blank.

My logic was “If I don’t know what’s happening, I can’t possibly have an emotional reaction to it.” It’s been working. It resulted in my first actual payout from my prop firm, and it’s been producing consistently profitable days. And, my average winning trade’s value is finally larger than my average losing trade.

Just trust your edge. If your edge says, “Don’t trade,” you should listen to it.

16

I ran into this exact problem. It was never entries, it was always stopping.

I’d hit my number and then give it back trying to squeeze one more trade.

What actually helped was putting hard limits around my session — max trades per hour/day, and being done once I hit my goal. I’m a developer too so I ended up just creating a Web app that would enforce these rules for the session with no way to get around it.

The important part though is it had to be something I couldn’t get around, because if I could override it, I would every time.

17

That is interesting, how will the web app prevent you from making trades on the NT8 platform ? I created an indicator for this to deactivate the native NT8 buttons and cancel all limit orders on creation so I don’t cheat the system. But that was on NT itself that is why i am curious how you created something external.