If you’ve been in the trading game long enough, you’ve definitely had days you took a lot of trades just to blow your account in the end. Well, this is called overtrading, which is one of the fastest ways to blow a trading account. Overtrading is also extremely catastrophic behavior in the case of funded accounts or prop firm challenges. Trust me, I’ve been there. It usually starts with a simple slip, one extra trade, one revenge entry, or pushing your luck after a win. Before you know it, your account is in drawdown, and your emotions take over.
For traders attempting to pass a prop firm challenge, overtrading can be fatal. Prop firms have strict rules, and one bad day of undisciplined trading can wipe out weeks of progress. Even for those of you who want to manage real funds using copy trading or other means, it can lead to disaster. In this post, we’ll break down exactly what overtrading is and how you can stop it.
- Overtrading usually stems from emotional triggers like FOMO, revenge, boredom, or pressure to perform, not from solid trade setups or strategic thinking.
- In prop firm trading, overtrading is one of the fastest ways to get disqualified, since it often leads to broken rules, daily drawdown breaches, and impulsive decision-making.
- Successful traders understand that less is more; they focus on high-quality setups and are willing to sit out if the market doesn’t align with their plan, even if that means taking just one trade a week.
- You can beat overtrading by creating structure: set a daily trade limit, stick to one session, journal everything, and walk away after a win or loss to protect your capital and your mindset.
What Is Overtrading?
Overtrading is exactly what it sounds like: trading too much. It’s when you keep taking trades even though you know you shouldn’t. Maybe there’s no setup, maybe it’s not your session, maybe you’re just tired, but you click the button anyway. Most of the time, it doesn’t even feel like a decision. It’s impulsive. It’s emotional. It’s like your brain checks out and your fingers take over.
It’s not really about how many trades you take. It’s about why you’re taking them. Are you trading because you’ve got a clean setup that fits your plan? Or are you trading because you’re pissed off, trying to force a win, or chasing some move you just missed? That’s the difference. One comes from discipline. The other comes from ego and emotion.
Let me give you a real example from my personal experience.
I once had a $100K funded account with E8 Markets. I was in a good spot, up around 6% for the month. All I needed was to stay calm, trade clean, and grind it out. But then I had one red day. Not even a big loss, just a couple of trades that didn’t work out. Instead of walking away, I stayed at the screen. Started looking for “opportunities.” Next thing I know, I’m revenge trading, over-risking, jumping into setups I knew weren’t there.
By the end of the day, I had broken the daily loss limit, and the entire account was gone. Just like that.
That wasn’t a strategy problem. It wasn’t the market being unfair. It was overtrading, pure and simple.
And the worst part? I knew it while it was happening. I could feel myself spiraling, but I kept going because I didn’t want to “end the day in drawdown.” That mindset cost me a $100K funded account I worked hard for.
Overtrading sneaks in when you let emotions make your decisions. It starts with something small, maybe just one extra trade, and then it snowballs. You start trying to win it back. You start ignoring your plan. You start gambling. And the market always punishes that.
If you’ve ever caught yourself in a trade and thought, “Why the hell did I even take this?”, yeah, that’s overtrading. And if you don’t put a stop to it early, it can end everything you’ve built.
Why Overtrading Is Catastrophic for Prop Firm Traders
Trading with prop firms is not just about making money. It’s about surviving. These firms don’t care how good your RR is or how much profit you could make. They care about one thing: rules. And if you break those rules, you’re done. No warnings. No second chances.
That’s why overtrading is so dangerous in this game.
Most prop firms have a daily drawdown limit. Most either have equity-based drawdown or balance-based drawdown rules. Some also impose consistency rules, and watch your lot size, or even your trading hours. You could be up 7% one day and out of the game the next just because you couldn’t stop clicking the button.
Let me put it this way: overtrading can both hurt your stats and blow your entire challenge or funded account.
When I lost my $100K E8 markets funded account, I didn’t break the account with one huge trade. I broke it with a series of emotional trades that added up to a violation. That’s how overtrading works. It tricks you into thinking you’re being active, productive, “making moves.” But really, you’re just digging a hole.
And what makes it worse with prop firms is the pressure. You’re always just a few days away from getting the enormous amount of trading capital you’ve always wanted. You’re watching the clock tick, wondering what could’ve been if my last demo trade in the challenge was real. Or maybe you’re down a little and think, “Let me just squeeze in a few more trades today to make it up.” That’s where the spiral begins.
You start forcing trades that aren’t there.
You start risking more than you planned.
You start chasing setups in sessions you don’t even trade.
And before you know it, you’re staring at an email that says your account has been breached.
Prop firms don’t care if you “almost made it.” They don’t care if it was just a bad day. They want and eagerly wait for you to breach their rules, so you’ll buy another challenge. If you can’t control yourself, you’re done for.
Why Traders Overtrade
Most traders don’t overtrade because they’re undisciplined. They overtrade because they’re emotional. FOMO kicks in, they see a move without them, and suddenly they’re chasing setups they would’ve ignored any other day. It’s not about the charts anymore. It’s about trying not to feel left behind.
Then there’s revenge trading. One loss flips a switch, and instead of accepting it, you try to “win it back.” That’s when things spiral. I’ve been there. I took one loss on my $100K account and let it mess with my head. I kept trading, trying to recover fast, and ended up losing it all.
Add in the pressure of passing a challenge, your financial freedom dreams, and the temptation to trade out of boredom, and you’ve got a recipe for overtrading. Most of the time, it’s just emotion, ego, and impatience running the show.
The worst part? You think you’re being productive. But all you’re doing is digging yourself deeper.
Common Signs You’re Overtrading
Overtrading doesn’t always feel like some dramatic meltdown. Sometimes, it creeps in quietly. You don’t even realize you’re doing it until the damage is done. That’s why it’s so dangerous, because most of the time, it feels like you’re just “actively managing” your trades. But in reality, you’re in full-blown tilt mode.
Here are the signs. If any of these are relevant to you, it might be time to pause and check in on yourself.
You Trade Without a Clear Setup
You open a trade and halfway through, you’re asking yourself, “Why did I even take this?” You didn’t wait for your confirmations. You didn’t follow your plan. You just clicked in because the market was moving and you didn’t want to miss out. Classic FOMO.
You Can’t Stop After a Loss
You lose one trade, and instead of stepping away, you jump into another. Then another. You’re trying to “make it back”, and suddenly, you’re down 3 or 4 trades deep, full of stress, and nothing’s clean anymore. That’s revenge trading, and it’s one of the worst forms of overtrading.
You Increase Your Lot Size to Get Back
Let’s say you just had a red day. The next morning, you go in heavier. Not because your setup justifies it, but because your ego does. You want to erase the loss in one shot. That’s not confidence, that’s desperation disguised as strategy.
You Take Every Setup You See
You’re in the charts all day, hopping from one pair to the next. EURUSD, then GBPUSD, then maybe NAS100, then a quick scalp on Gold… you’re all over the place. You justify it by saying you’re being “flexible” or “diversifying,” but really, you’re just overtrading.
You Ignore Sessions or Killzones
You’ve told yourself a hundred times you only trade the NY session, or even a specific ICT Killzone. But suddenly it’s midnight, you’re watching Asian session candles, half-asleep but still trying to catch a move. This isn’t discipline, it’s addiction.
You Feel Mentally and Emotionally Drained After a Session
Trading shouldn’t leave you feeling like you ran a marathon. If you’re exhausted after every session, it’s probably not because the market was “volatile.” It’s because you were fighting your own emotions the entire time. That’s a clear sign you’re overtrading.
How to Stop Overtrading
Alright, now let’s get to the practical stuff. I’m gonna be quick and explain in the simplest way possible. These tips and tricks have massively helped me avoid overtrading altogether or stop it immediately when I detect it early.
- Set a daily trade limit: Pick a number, like 2, 3, or max 4 trades, and don’t go past it. It forces you to wait for clean setups.
- Stick to one session: NY only? Then only trade NY. Don’t randomly jump into the charts during Asia or London, because you’re bored. Get a life (sorry, had to use it here).
- Pre-plan your trades: Know your levels and setups before the market opens. No plan = no trade. Simple.
- Walk away after a win or a loss: Hit your goal or your limit? Shut it down. Don’t let emotions run the next move.
- Journal everything: Entry, exit, reason, emotion. Log it all. You’ll catch patterns real fast (and your own bad habits).
- Use risk control tools: Set soft daily loss limits or alarms to stop yourself before you spiral. Protect yourself from… yourself.
- Demo when emotional: Feel the urge to force a trade? Switch to demo, or have a small account on the side just for this. Scratch the itch without wrecking your account.
I implement all of these methods to keep myself disciplined and avoid overtrading. It all began when I realized how much more profitable I’ll be when I learn to manage over trading.
Conclusion
If there’s one thing I’ve learned the hard way, it’s that trading more doesn’t mean you’ll make more. In fact, it’s usually the opposite.
The best traders I know don’t take 10 trades a day. They wait. They stalk. They know exactly what they’re looking for, and if it doesn’t show up, they do nothing. That’s not laziness. That’s discipline. That’s how you pass challenges and stay funded.
The goal isn’t to be in the market all day. It’s to protect your capital and take only the setups that align with your edge. One solid trade a day is enough. Sometimes, one per week is enough. But overtrading? That’ll destroy you. It’ll drain your energy, wreck your psychology, and eventually, kill your account.
If you want to pass your prop firm challenge, stop trying to “grind it out.” That’s a losing mindset. This isn’t a hustle game, it’s a precision game.
You win by waiting. By doing less, but doing it right.
Every click matters. Every trade counts. So before you place your next order, ask yourself:
“Am I trading my plan, or am I just trading my emotions?”
The market won’t care how badly you want the profits. But it will reward patience. It will reward structure. And it will punish overtrading every single time.
Take this seriously, or take the loss(es). It’s up to you.
