Do you know what strategy hopping is?
(Strategy Hopping).
In trading, it is a phenomenon in which the trader and investor change their strategy frequently or quickly after each loss or after a short period of not achieving the desired profits or results. Instead of sticking to a specific strategy and testing it over a long period of time, the trader may move from one strategy to another in the hope of finding the magic solution that guarantees immediate success in the market.
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Why does strategy hopping happen?
1- Impatience
Some traders quickly get frustrated if their strategy does not achieve positive results immediately, which prompts them to look for alternatives.
2- Being affected by new information
Exposure to new information or advice from multiple sources may make the trader feel that their current strategy is not the best.
3- Psychological pressure
Fear of loss or greed for quick gains can lead to a constant search for new strategies.
4- Lack of confidence in the strategy
A trader may feel a lack of confidence in their current strategy if they face a series of losing trades, which prompts them to move to a new strategy.
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Negative effects of strategy hopping
1- Instability in the strategy and the constant transition between strategies makes it difficult to achieve consistent performance or learn from mistakes.
And it returns you to the zero point in learning
2- Loss of long-term vision Every strategy needs time to show its effectiveness and the rapid transition between strategies prevents the trader from benefiting from his strategy in the long term.
3- Increased costs Frequent changes in strategies may require additional costs,
Whether in terms of time spent learning new strategies or spending on new indicators, courses and subscriptions
4- Psychological stress
Continuous change can lead to psychological stress, tension and loss of confidence, which may negatively affect the ability of the trader and investor to make good decisions at the right time.
