At first glance, it might seem that a system generating more trades is better — more trades mean more opportunities, faster growth, and more data to analyse, right? Not necessarily. While frequency can offer benefits, equating trade quantity with quality is a flawed assumption. In fact, more trades can often lead to more problems unless those trades are high-quality, edge-based, and properly managed. This article explores why “the more trades your system produces, the better” is a dangerous myth, and what truly defines a superior trading system.

Why traders believe more trades is better

Many retail traders chase frequent setups because they associate trading activity with progress. The logic goes:

• More trades = more chances to profit
• More trades = faster learning
• More trades = more compounding potential

But this belief overlooks critical factors like market conditions, edge quality, execution costs, and trader psychology. In practice, overtrading is one of the most common reasons traders fail — even when they have a decent system.

The downside of excessive trade frequency

1. Lower-quality setups:
Systems that force frequent trades often rely on weaker or looser entry criteria. The more you lower your standards to generate trades, the more your win rate, risk-reward ratio, or expectancy suffers.

2. Increased transaction costs:
More trades mean more spreads, commissions, and slippage — especially in lower timeframes or less liquid markets. These costs can eat into your profits quickly, particularly with scalping or high-frequency strategies.

3. Emotional fatigue and burnout:
High-frequency systems demand constant attention and quick decision-making. The psychological toll of managing multiple trades per day or hour often leads to rushed decisions, missed exits, or risk management breakdowns.

4. Smaller edge per trade:
Many high-frequency strategies have low per-trade expectancy. When even a slight change in slippage or latency occurs, the entire edge can vanish. You become more reliant on perfect conditions to stay profitable.

5. Greater drawdown risk:
More trades can also mean more exposure — especially if your risk-per-trade is not adjusted accordingly. One bad session or streak can have a disproportionate effect on your account.

When more trades can be beneficial

There are scenarios where higher trade frequency can be useful — but only if supported by a robust system and infrastructure:

1. High expectancy with automation:
Algorithmic systems can handle dozens or hundreds of trades per day — as long as they operate within a strict, tested framework and with minimal latency.

2. Fast feedback loops for learning:
Beginners trading on demo accounts might benefit from seeing more setups quickly. But this should be used for learning structure, not as a substitute for precision.

3. Micro position sizes:
If you’re risking very small amounts per trade, higher frequency may be acceptable. Still, the focus should remain on edge quality, not trade count.

4. Market-making or arbitrage models:
Professional prop firms and HFTs rely on high-frequency trading — but their systems are built around speed, co-located servers, and statistical arbitrage, not manual execution or discretionary setups.

What truly defines a better system?

1. High-quality setups:
A system that produces fewer but high-probability trades is often more profitable and sustainable over time than one that floods the market with noise.

2. Positive expectancy:
The goal is to consistently extract edge from the market. Even if your system produces just 5 trades a week, it can outperform one that produces 50 with poor metrics.

3. Time efficiency:
A better system allows for a good return on time invested. Systems that generate more trades often demand constant screen time with diminishing returns.

4. Stress management:
The best systems align with the trader’s personality. Not every trader can handle the psychological pressure of executing dozens of trades per day.

5. Strategy adaptability:
Strong systems perform across multiple conditions or have filters to pause during unsuitable environments — rather than forcing trades for the sake of activity.

Conclusion

The belief that “the more trades your system produces, the better” is one of the most dangerous myths in trading. Quantity means nothing without quality. In fact, fewer high-quality trades with a strong edge, solid risk management, and consistent execution almost always outperform high-frequency systems that lack structure. The goal isn’t to trade more — it’s to trade better.

To learn how to build and refine precision-based systems that maximise results without overtrading, explore our Trading Courses at Traders MBA — designed to help you master quality over quantity.