Taking more trades than your plan calls for, usually out of boredom, FOMO, or the need to make something happen.
Each unnecessary trade pays the bid-ask-spread, commissions, and slippage for an entry that lacks an edge. Overtrading also causes fatigue, which degrades the good trades that follow.
A daily trade cap and a written list of valid setups are the simplest fixes. The trading-journal will show that the extra trades have negative expectancy.
Example: a trader's plan allows three A-grade setups a day. He takes eleven trades. The three A-grade trades net +2R; the other eight net -3.5R.
Original diagrams for the ideas on this page. Illustrative, not real market data.
Expectancy: the average trade. Forty trades sorted by outcome: 24 small losses and 16 larger wins. Weighting each side by how often it happens gives the average result per trade, marked here by the dashed line at +$120.
Educational only, not advice. Spotted an error? Post in Site Feedback.