What is Overtrading?

When you are new to the market and you are getting started out, what do you do? You find a broker and trading platform, and you start looking at companies you heard your friends and family talk about over the years.

Eventually you get sick of watching price move without you, you see the stocks you like go up and you feel like you are MISSING OUT.

You decide to fund your account and get started. You make a couple purchases either in stock or in options and maybe you start to make some money. You see price fall one day, so you do what you’ve always heard you’re supposed to, you buy the dip.

The next day, more down so what do you do? Buy more and try to get REVENGE. No strategy. No concept of how price moves on a chart. Weeks go by and you’ve been buying, now the news doesn’t sound so good, they talk of things like recession and pandemic and you’re losing your shirt! So what does a new trader do? They sell.

When its just about as bad as it gets, they sell! All of that averaging down, all of that invested time and capital just gone.

A completely missed opportunity. Now the market begins to rise and rise and eventually they start to feel like they missed it until what happens? They buy and try to CHASE the trade.  But guess what? The selloff isn’t over and the process is repeated.

If you feel like you’ve encountered this scenario, I’ve got news for you, you are NOT alone!

In the last month many traders have reached out to me asking how I was able to predict the pullbacks and rallies of this market with such accuracy over the past few months (Feb 2020 – April 2020).

The answer? I have a very good strategy and I know how to follow it! When it tells me to buy, I buy and when it tells me to sell, I sell. Period. There is a lot of price action in the middle that I do not participate in at all and that’s ok!

I know if I wait for my system to give me signals and follow the plan that go with every trade, I will be CONSISTENTLY profitable! If you are a Momentum Trades subscriber, you already know the kind of gains you can achieve!

Consistency is key. But Eric, how do you become consistent in your trading?

The reality is.. ITS EASY! Learn to identify key levels in the market like market makers, learn to identify the trend and never fight it. And only enter trades when you get clear signals of continuation.

A lot of new traders want to be in trades all day every day, but the simple fact is, not everyday will be a trading day according to your strategy! Sometimes there just aren’t high quality setups to trade and being able to recognize this is crucial.

Those "boring days" are usually the days that trades are setting up and if you are jumping in the trade before it’s ready you enter a high-risk situation without a clear plan. Besides that, your capital is tied up when it IS time to strike. It only takes a couple of good trades a week to make a killing in the market especially if you aren’t taking all the crappy trades!

If you want to be successful in your trading, you need to learn to remove the emotion. Developing a good trading system allows you to do exactly that.

No FOMO, no revenge trading, no chasing! These are the things that lead to ruin.

Learn to treat every trade like you are being graded on the execution of your rules and If you don’t have a set of rules to follow start making them!  Build off the ones included in my Momentum Trades