https://www.simple-stock-trading.com/major-risks-of-day-trading/ 

Overtrading is one of the main reasons why traders fail, and the thing is the people who overtrade never really realize they are and if they do realize they don’t know how to stop themselves from doing it. The mentality of individuals who overtrade is that they think they need to be in everything and always be trading. That is the only way to be profitable. That couldn’t be further from the truth. Below are a few ways to overcome that problem and get your account under control. 

1. Overtrading comes from being too emotional and attached. If you start getting anxious and yelling at the computer or making trades that you didn’t plan then walk away. Step back and go for a walk until you have gotten that out of your head. If it doesn’t go away, then stop trading for the day. Not trading is better than being in the red.  

1. Have a max stop loss for the day. If you don’t have a cap then you could keep trading until you have lost half of your account value. A good number that I use is if I lost 5% for the day then stop because that could grow quickly. Then you start trading because you need to make back what you lost and that leads to revenge trading and it creates a snowball effect of mistakes and losses. 

1. Don’t trade out of boredom. That will lead to you hunting for signals and plays that you didn’t prepare for which will then lead to overtrading and unnecessary losses. Find your plays for the day before the market even opens and have your levels picked out. That will keep you from overtrading and only trading what you prepared for and expected.  

1. Lastly, don’t let the fear of missing out get into your head. You will always miss trades and that is inevitable. You won’t catch every trade. But if you let that control you then you will start taking a ton of trades just because what if the move is the best move ever and you miss out on it. Well if it’s not you just got a loss that you shouldn’t have and it leads to more problems. It’s better to miss out on an opportunity you aren’t prepared for than to take the trade without proper research or risk management. That is trading with your emotions which is the biggest reason why traders fail.  

If you can learn to control your emotions and stick to your trading plan then you will be able to control your trading and keep it in check. It ultimately comes down to being prepared for the market before it opens. So, block some time out for stock research and write down your levels because that will make the biggest difference whether you overtrade or not.