Why the Quality of Your Trades Is More Important Than the Quantity

Why the Quality of Your Trades Is More Important Than the Quantity

Opportunities in trades will come and go regularly. You can’t cover all of them, but you will always find more.

Therefore, learning a forex trading course is always the best option for joining the forex profession. But there’s another question that haunts traders – the question of quality over quantity.

Is it true for the forex trading world? It all comes down to overtrading.

What Is Overtrading in Forex?

Overtrading is when you constantly check charts and make trades. You don’t have any fixed routine or trading system. Opportunities are abundant, and you try to grab them all. So, you fail to maintain a balance.

You neglect everything else and start trading. That’s harmful, and you will end up making even worse decisions. Overtrading is one fundamental factor that matters between the quality and quantity of trades.

As long as you can balance it, you should be good to go.

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Market noise is when there is a specific trend or news on the trend that keeps growing. People keep trading in these currencies without understanding the benefits.

Is it effective or just market noise? It can be challenging to distinguish between market noise and a quality trade in forex. 

The best you can do to eliminate this factor is to learn forex trading. With a professional course, you will learn how to weed out unnecessary noise and focus on making decisions that matter. 

In this case, quantity doesn’t matter. It comes down to the quality of the trades. Once again, quality proves to be more important than quantity.

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Low-Quality Trades from Losing your Edge

If you start overtrading, you will see that you’re losing your edge. You are not up to the task and find yourself jumbled up in all the trades you’re making.

This will lead to impairment in your decision making. Inevitably, you will end up making several low-quality trades.

When you make low-quality trades, the quantity won’t matter. After all, the poor decision will always be poor, but that doesn’t mean you can’t learn from it.

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So, why does the quality of trades hold more value than quantity or trades? Let’s take the best example there is.

Example A (Quantity):

  • Imagine you had $1000, and you trade ten times in a month.
  • Out of those ten times, you successfully traded three times with an overall growth of 6%. 
  • This will total to $1060, a growth of $60
  • However, the seven trades you lost, would result in a loss of 7%. Then, it brings you down to $990
  • Hence, you had a nett loss of $10 and not a profit which looked great at first. 

Example B (Quality):

  • In this situation, you have $1000. But you lost seven times at a 7% rate.
  • You will have around $930, facing a loss of $70
  • However, now you were successful three times with an overall growth of 14% 
  • You would’ve recovered your losses, your account is now $1070, making a profit of $70.  

These examples can show that the quality of trades matters more than the quantity. Many people often start trading more, thinking that they will accumulate more success.

However, you’re exposing yourself to the higher probability of being wrong or losing. Having more successful trades than unsuccessful trades is always great, but all is for nought if you win more but lose big.

As such, it’s critical to find quality trades over quantity.

The Best Rule For Beginners

Planning and having a thoroughly tested trading system will always be the best tip that you can follow. Having discipline is essential if you want to succeed as a forex trader. 

You should focus more time learning forex trading rather than making trades initially. Use some of your free time to accumulate data by backtesting and gathering information. Perform analytics and make predictions, then make the trades. That’s the best way!

the bottom line

Hopefully, now you understand why the quality of trades matters over quantity. 

To ensure that you make quality trades, you need to pursue a credible forex trading course. Of course, almost anyone can trade without qualifications, but it is the best option if you want to be the best and consistently make money.

You will also receive other valuable skills and knowledge, including how to read the market. Platforms like Guerrilla Trading also provide reviews and forecasts on trades. You can use these opportunities to ace the trading world.