Overtrading and chasing losses

A trade count is a number written before the session opens. It sets the maximum number of round turns allowed for that day. A round turn is one entry and one exit. The plan in this course allows three round turns. A busy morning can pass that number before the first coffee is finished.

Each round turn carries a cost. On AUD/USD at 0.6640, one pip is 10 USD on a standard lot. Dividing 10 by 0.6640 gives about A$15.06 for a full round turn. If the broker charges half on entry and half on exit, each side is about A$7.53. These figures move with the AUD/USD price, so the A$ amount is never fixed.

Multiplying the count by the cost gives the day's bill. Three round turns at A$15.06 is A$45.18. Twelve round turns is A$180.72. The difference is A$135.54, and it is paid whether the trades win or lose. The spread does not care about the result. It is charged on the way in and on the way out.

The count is the part you control. The market decides how far price travels. The plan decides how many times you pay the spread. A day of 30 trades at A$15.06 is A$451.80 in cost alone. That number is not a loss from a bad call. It is a loss from a busy hand.

A losing trade feels like a debt. The mind treats the money as owed back to the account. That feeling is not a plan. It is a reaction. The reaction asks for more trades and larger size. Neither request comes from the written count.

Raising size to recover one loss changes the arithmetic. Suppose the plan size is one standard lot. Doubling to two lots doubles the pip value to 20 USD. At 0.6640 that is about A$30.12 per pip. The cost of the round turn also doubles, to about A$30.12. A single extra pip against the position now costs twice what it did.

The same doubling applies to the spread. Two lots pay two spreads. The entry side is about A$15.06 and the exit side is about A$15.06. The account is charged before the trade has moved at all. If the trade then goes the wrong way, both the spread and the adverse move are counted.

Chasing is not a strategy. It is a size increase with a story attached. The story says the next trade will fix the last one. The platform does not read stories. It reads the order ticket, and the ticket shows the larger size.

The body gives warnings before the count is passed. The hand moves to the order button without a plan entry. The eyes check the profit and loss figure more often than the chart. The breath shortens. These are not moral failings. They are signs that the session has stopped following the written count.

One signal is the urge to win it back today. That urge is the moment to close the platform. The plan already set the count. The count does not change because a trade lost. Closing the platform is an action, not a feeling. It ends the session at the written number.

Another signal is a size that is larger than the plan allows. If the plan says one lot, two lots is a different plan. The larger size changes the A$ cost per pip and the A$ cost per round turn. It also changes the size of the loss if the trade fails. The account is exposed to a bigger number for the same reason.

A third signal is a trade taken without a reason written down. The reason can be short. It can be one line. But it must exist before the order is placed. If it cannot be written, the trade is a reaction, not a decision. The count is there to catch that reaction.

The platform shows the spread before the order is sent. On AUD/USD it may show 1 pip, or it may show more at busy times. Brokers vary in spread, commission and swap. Some quote a wider spread on AUD/USD when news is due. The figure on the screen is the one that applies to the next trade.

The platform also shows the pip value in the account currency. At 0.6640, one pip on a standard lot is 10 USD, which converts to about A$15.06. That conversion moves with the AUD/USD price. If the price falls, the A$ value of a USD pip rises. The cost per round turn is therefore a moving figure, not a fixed one.

Commission and swap are separate from the spread. A broker may charge a commission per lot on entry and exit. A swap may be added or subtracted if a position is held overnight. These are not the same for every broker. The only reliable figure is the one shown on your own platform.

Before the session opens, check three numbers. The spread on AUD/USD. The pip value in A$. The commission per lot, if any. Write the daily trade count beside them. When the count is reached, the session ends. The platform can be closed without checking the result of the last trade.

The plan for the day allows three round turns on AUD/USD. The price is near 0.6640. One standard lot is the size. The spread is 1 pip. The pip value is 10 USD, which converts to about A$15.06 for a full round turn. The session starts with these numbers written down.

The first trade is taken with a written reason. It loses. The cost of the round turn is about A$15.06, plus the adverse move. The count is now two remaining. The second trade is taken with a written reason. It also loses. The count is now one remaining. The cost of two round turns is about A$30.12 before the adverse moves are counted.

The urge to win it back appears. The plan does not change. The third trade is taken at the same size, with a written reason. It wins. The cost of the third round turn is about A$15.06. The day's spread cost is about A$45.18 across three round turns. The count is now zero.

The session ends. No fourth trade is taken, even if the third trade lost. No size increase is made, even if the day is down. The platform is closed. The next session starts with a new count and the same size. The account has survived a losing day without a larger position.

The alternative is a day of 30 trades. At A$15.06 per round turn, the spread cost alone is about A$451.80. That figure is paid regardless of the result of any single trade. It is the price of a busy hand, not a bad market. The written count is what keeps the two days apart.

A single card can hold the whole plan. It lists the instrument, the size, the daily trade count and the maximum loss in A$. It does not list a target. It does not list a prediction. It is a set of limits, not a set of hopes.

The card is written before the session. It is not edited during the session. If the count is reached, the card says stop. If the size is one lot, the card says one lot. The card does not know whether the last trade won or lost. It only knows the numbers written on it.

The card also names the signals. The urge to win it back. The larger size. The trade without a written reason. When one appears, the card says close the platform. That instruction is the same whether the day is up or down.

The card is reviewed after the session, not during it. The review asks one question. Did the count match the plan. If it did, the session followed the rules. If it did not, the next card is written with a smaller count. The size stays the same.