Overtrading - the risky trading
What is Over Trading?
Buying and selling of shares at big quantities by using margin amount is called over trading.
Basically brokers provide margin amount for day trading.
For example
If you have Rs 25,000 amount in your trading account then you can trade till Rs 1 lakh (this is 4 times margin amount) or some brokers even provide higher margin amounts.
If you are new and not fully aware of market principles and strategies and start trading by using entire 1 lakh rupees then it is very risky and it is called as over trading.
We believe “over trading” is most critical factor among the day traders and over trading will lead you to losses if you don’t follow appropriate strategies or if don’t have experience.
Generally traders do over trading and get panic if the price moves against their trade and this panic generates fear in their mind and finally they square off the trades by accepting losses.
If you are very experienced then you can use margin amount with appropriate precautions.
We have noticed that some traders put all their savings money in trading which is also very risky and this is not at all recommended.
It is not possible to earn lakhs in a single day without knowledge and experience. So don’t try overtrading, it can wipe out all your money.
What is Over Trading?
Buying and selling of shares at big quantities by using margin amount is called over trading.
Basically brokers provide margin amount for day trading.
For example
If you have Rs 25,000 amount in your trading account then you can trade till Rs 1 lakh (this is 4 times margin amount) or some brokers even provide higher margin amounts.
If you are new and not fully aware of market principles and strategies and start trading by using entire 1 lakh rupees then it is very risky and it is called as over trading.
We believe “over trading” is most critical factor among the day traders and over trading will lead you to losses if you don’t follow appropriate strategies or if don’t have experience.
Generally traders do over trading and get panic if the price moves against their trade and this panic generates fear in their mind and finally they square off the trades by accepting losses.
If you are very experienced then you can use margin amount with appropriate precautions.
We have noticed that some traders put all their savings money in trading which is also very risky and this is not at all recommended.
It is not possible to earn lakhs in a single day without knowledge and experience. So don’t try overtrading, it can wipe out all your money.
