Over-Trading

What is Over-Trading?

Author: Adin Lykken
Adin Lykken
Adin Lykken
Consulting | Private Equity

Currently, Adin is an associate at Berkshire Partners, an $16B middle-market private equity fund. Prior to joining Berkshire Partners, Adin worked for just over three years at The Boston Consulting Group as an associate and consultant and previously interned for the Federal Reserve Board and the U.S. Senate.

Adin graduated from Yale University, Magna Cum Claude, with a Bachelor of Arts Degree in Economics.

View Profile
Reviewed By: Hassan Saab
Hassan Saab
Hassan Saab
Investment Banking | Corporate Finance

Prior to becoming a Founder for Curiocity, Hassan worked for Houlihan Lokey as an Investment Banking Analyst focusing on sellside and buyside M&A, restructurings, financings and strategic advisory engagements across industry groups.

Hassan holds a BS from the University of Pennsylvania in Economics.

View Profile
Last Updated:May 6, 2022

Over-trading is a term used in trading to refer to when a trader is trading more frequently and / or in larger amounts then they should, usually either in the pursuit of more profits or chasing losses. This causes bad decisions to be made (typically due to emotions, lack of analysis, poor hedging etc.) and for profits to be reduced or losses to be exacerbated.

Many traders recommend a stop level for a given amount of profit or loss in a trading session and after hitting that level, to stop trading for that period in order to avoid over-trading.

Excel Modeling Course

Everything You Need To Master Excel Modeling

Banner that leads users to the Excel Modeling Course landing page.

Learn More

Free Resources

To continue learning and advancing your career, check out these additional helpful WSO resources: