New people coming into trading these days are lucky in one sense. I believe it is possible now to simulate live trading fairly accurately. I have been playing with Buttontrader in simulation mode with live data feed in order to learn how to use it and am quite impressed. With some frontends in simulation mode the fills are not realistic but Buttontrader puts you in line and fills you when your turn comes. It also deducts your commissions from the P&L. Of course you cant get complete realism but I wished I had had this tool when I started. I see no reason to risk your money until you acheive consistent profitability with one of these simulators. Using simulation in recorded mode does not work well, imo, because you need a lot of other information. Trading simulation with a live feed gives you access to everything. I urge you new traders to go this route. Pick a strategy and test it for a few weeks. I understand that Ninjatrader is quite good for this too.
I use dynaorder.com to send orders to IB - or a papertrader - automatically from my eSignal charts. check them out too.
"Are you a good shot?" "Well," said the duelist, "I can snap the stem off a wine glass at twenty paces," and he looked modest. "Thats all very well," said the unimpressed second, "but can you snap the stem off the wineglass while the wineglass is pointing a loaded pistol straight at your heart?" Speculation is a game of risk. Without any risk, papertrading is an excercise in futility, and will only serve to reflect much less than half of what this game truly is... PEACE and good-speculation...
I dont entirely disagree with this but even if you only get half results I still think it is better than jumping in cold.
since i have known quite a few traders over the years who really never "got it" . a good simulator would have saved them mucho money!! hopefully new traders will make sure to use a simulator with real solid success before risking a dime!!!!
Better to know it's cold than fall victim to the illusion that it's balmy. P.S. Sorry, I feel like Nima Bashi with all the highlighted "emphasis's" in my post's.
Paper trading is good for one thing and one thing only, to test you Tech. System. THAT IS IT and simulators are no diffrent. You will never know how you will truly react in a trade until its live, with your money and your true PSYC. Paper trading and Simulators leave one key element of trading out and this element can not be reproduce in any many but actually trading real money...that is you Emotional Reaction, your Psychology of reaction.
you will find that the majority of people trying to be professional traders will disagree with you. they will give you answers like Specul8r and Pabst did (they are in good company!). somehow, most humans think that the only way to 'learn' is to risk real money. unfortunately, this is farthest from the truth. trading IS 90% psychological. however, of that 90%, what people don't realize is that the majority of the psychological hurdle comes from being able to develop a trust in a system or edge. by risking their money, they focus on the wrong thing, and quite sadly never get to the point of developing a system where they consistently and almost robotically take money from the market. you will always find that people value their ideas more than their money. that will never change (hopefully not, or i wouldn't be trading for a living!!). you could scream at them and show them the reason for this, but they will ALWAYS trust their own opinion (most people don't like to be wrong, just watch the responses i get) over the truth.
I'll go with funky here. The people who reiterate the tired old argument that papertrading is worthless because you're not putting any money at risk miss the point of papertrading. They would have you jump in without preamble, without bothering to find out if your system/strategy/method works or not. This isn't professional advice. It's testosterone. Papertrading successfully is no guarantee that your real trading will be as successful. But if you can't papertrade successfully, you sure as hell won't be trading successfully with real money.