Two of the most account-destroying habits share one root: trading to satisfy an emotion rather than to execute an edge. Naming them is the first step to stopping them.
Overtrading
Overtrading is taking trades that don't meet your criteria — out of boredom, the need to 'do something', or fear of missing out. Each marginal trade adds cost (spread) and risk without adding edge. More trades is not more profit; better trades is.
Revenge trading
Revenge trading is trying to immediately win back a loss, usually by oversizing the next trade. It converts a planned, small loss into an unplanned, large one. The loss already happened; the revenge trade just adds a second, bigger mistake on top.
The written defences
Defend against both with rules: a maximum number of trades per day, a clear setup checklist (no checklist, no trade), and the daily loss limit that forces a stop. When the urge hits, the rule — not your willpower in a weak moment — is what protects you.
Key takeaways
- Overtrading adds cost and risk without adding edge — quality over quantity.
- Revenge trading turns a small planned loss into a large unplanned one.
- Defend with a daily trade cap, a setup checklist and a hard loss limit.