More trades is not more opportunity. What happens to an edge when you take setups that only nearly qualify. This lesson covers: More trades is not more opportunity, What marginal trades do, Costs scale with count, The hidden cost of activity, Why it happens, A day with nothing, Focus applies to instruments too, More markets, more chances?, Grade your setups, Put it together.
Most of the Academy is free — this advanced lesson is part of the Pro plan. Already Pro? Log in from the header above.
See plansGoing deeper
Overtrading is usually described as a discipline problem, but it is also an arithmetic one: every marginal trade adds a full unit of risk and a full set of costs while contributing little or negative expectancy.
This is the mechanism behind the common experience of a method that "stopped working". Frequently nothing about the method changed — the criteria for taking it quietly loosened.
It depends entirely on the criteria. What matters is whether your actual count matches what the method should generate — a large gap indicates loosened standards.
One instrument watched closely usually produces better reads than several watched loosely, because behaviour is learned slowly and does not transfer between markets.
Write the criteria down away from a live chart, grade every setup against them, and track how many trades you took that did not qualify. Measurement changes behaviour more reliably than intention.