Overtrading

Some people think that to be a successful trader you need to be trading all the time.  Not true!

I always knew this, but every once in a while I need a reminder.  I found one such reminder recently in the great book "Street Freak - Money and Madness at Lehman Brothers."

In this Memoir by Jared Dillian, a Lehman Brothers trader, Jared relates how he made well over $100 million trading (most of that went to Lehman).

Regarding overtrading, Jared says:

"I had made, by that point, about $6 million simply day-trading S&P futures.  After seven years, I had finally solved the mystery.  Trade only when you have an edge.  Otherwise, don't trade.  Out of the first 125 market days of the year, I had traded on perhaps 10 of them, and made $6 million.  I didn't have to be involved in the market all the time."

Something to think about, if you take 5, 10 or more trades per day...