Going into trading always requires striking up the perfect balance. It can be easy for a trader to either fall short or do too much. Undertrading and overtrading are both common mistakes that many traders can find themselves committing one way or another.

Learning To Trade

As a trader slowly learns the basics as well as complexities of trading, he or she begins to also learn more about the different styles and methods of trading. The trader then may be able to find the right method and style that suits perfectly to achieve certain trading aims and goals. A trader may find a fast-paced technique that suites an aggressive style while another may find a more laid-back yet technically sound trading method that works best with one’s character and personality.

Trading Less, Trading More

The issue with trading for most people is that it can be hard to determine of they are trading more or trading less. Undertrading can cause traders to lose out on opportunities while overtrading can cause them to lose out on their profits and earnings. It is important for traders to know how to strike up the right balance in order to maximize their potential earnings as well as reach their trading goals faster.


Undertrading can be a situation where a trader usually trades a bit below than what he or she can be capable of doing. This usually happens to traders who find themselves not fond of taking too many risks. Their concern for the risks and the effects can cause them to stand back on certain trades, causing them to lose out on potential profits. Undertraders usually are those who usually find themselves regretting not making a certain trade previously or those with a trading plan that tells them to get in but didn’t.


Overtrading is a situation where a trader may be trading more than he should be. Some traders would want to get into every possible opportunity as it presents itself. Foe each opportunity they see, they tend to take part on it, not exactly realizing just how much they would stand to earn from each one. Such traders should realize that each trade also comes along with certain fees and commissions that traders have to pay for.

Although a certain trade may be capable of providing profits, how much the trader stands to pay for in terms of fees and broker commissions. Sometimes it can turn out that the trader only earns a few dollars for the trade. Settling for a few dollars worth of profit trading all of the time come sometime also amount to losses if taken cumulatively. One can be overtrading when he or she settles for making a few dollars above the commissions and fees he or she pays for each trade.