Never paper traded (too impatient), so absorbed an upfront opportunity cost of around £25,000 over 4 years. Primary benefits for myself were: 1) harsh baptism through the fire, gaining an immediate understanding of the market's "nature" and the level of respect the market demands. 2) learning to park ego and expectation while also learning that my emotions were not suited to the discretionary style. despite being a software engineer, it hadn't occurred to me for years that I could use those skills to automate my desires. barack obama changed all of that in 2008 when he riled against quant fund managers making outlandish profits during the crisis - what the hell is a "quant fund" I wondered - thanks to google I found out. Everyone is different. I tend to jump right into things, paying penalties early but at the same time, learning lessons quickly. It's not for everyone. If one requires incentive to paper trade, some brokers run paper trading cash prize competitons which take place against live pricing feeds. The bottom line though is this, the market remains ready to separate you from all hard earned monies. Your job is to figure out how to mitigate this force by any means necessary. Good prep. More caution. Thorough research. What ever it takes. Nothing in reality will make you more profitable today because it spoke to your ability to be profitable yesterday. What will make you profitable is the ability to be Disciplined and Consistent. You can paper trade for 10 years and face the market tomorrow. If paper trading didn't help you become more of a robot, it's 10 years wasted. -£2500 feels very different on a LIVE system compared to a DEMO. I've closed out -£4000 because I knew the market had permanently turned around due to surprisingly bad news that just landed 10 seconds before. Closed out for an irritating loss, flipped sides and took +£10,000. Total time from realisation, to unemotional decision taking, to close at a loss, to flip, to close for a profit was 1 minute. Many can do that on a DEMO system and end up feeling brilliant. It's a different level of 'ability' when you are doing it with money in your bank account. Discipline and Consistency are all that matters. Know (or get to know) yourself and be patient enough to give yourself every opportunity to develop insight, intuition, discipline and consistency. The market isn't going anywhere - so which ever way you go there is no need to rush
If you don't master well the 10% technical it might cause a 100% loss. But as your mind management will be good you will not care about the wipe out. So the mind management will work perfectly! Most people have not enough money to override a few 10% technical wipe outs in a row. That's why papertrading was invented. So first master paper trading, because even 99% mind management cannot rectify the missing 10% technical part. Papertrading is for FREE and without ANY FINANCIAL RISK. If you don't know how to drive a car what would you do: just get in your brandnew 500K Ferrari and see what will happen first learn the basics about driving a car
A trader can not talk about simulator trading in a way that "I did well" or "I did not do well" unless some someone examines the specific details of the routine the trader had during the simulator trading. Its just too general of a statement. Yet, I've seen a few trade in person on a simulator and damn nearly have all winners but when they switch to real money trading...they damn nearly had 50% or less winners. There's just too much crap they did during the simulator trading that they could not admit too nor wanted to deal with but as soon as they traversed into real money trading...they rarely traded the same way they did in simulator trading and they psychologically couldn't manage it when they saw their real money account shrinking. Lets put it this way, most will do well in simulator trading while the same numbers will perform poorly in real money trading. Simply, very few traders will do well on simulator and then do well in real money trading...mostly due to the fault of the trader and some of it due to the fault of the broker. That's just one of the many problems that's reinforce by others...they say to not do any real money trading until your successful in simulator trading. The first real issue is to do not traverse into real money trading until someone has watched you trade in person in simulator trading and then watch how you're trading in real money trading for a few days...they then tell you what you're doing that's different when comparing the two... Only a small percentage do the above. Its a sad fact of trading and all too often its the commonality experience by traders and some have had the courage to document such here at ET via showing trade fills in their broker trade execution platform (simulator & real money) but they too do not go into any specific details about their trading routine (especially the psychological aspects) beyond the general stuff about what they are doing in the simulator trading versus what they're doing in the real money trading. It's that stuff that you can only see, review, analyze via sitting side by side (in person) with someone when they're on a simulator versus when they are real money. Realistically, nobody is will to do such for another. Don't misunderstand, I'm not saying simulator trading has no value. I'm saying that it does have value but its approached the wrong way in which another trader should be monitoring the trader in person not to tell them what to trade, what to buy, what to sell but to tell them what they saw when the trader traversed from simulator to real money. Yet, in today's technology...any one can video record their trading routine from the moment they get out of the bed until they turn off their computer at the end of the day while on simulator versus (in comparison) to their trading routine when they're real money trading including screen recording but who the hell will do such a thing...hours each day of recordings ??? Funny thing is this, after a few blowups and after losing 10k - 100k in the markets...many will wish they had done exactly that...video record their trading day and then let someone review it...all the personal/private details. Most of the fault is on the trader but the brokers can do a better job in helping traders in the simulator phase and they should be suspicious when most of their traders do so well on simulator but then do so poorly in real money in comparison of the two. P.S. Imagine if something like that happen to a retail trader on simulator and then real money trading for all too see...something like movie played in by Jim Carrey called The Truman Show (l love that movie) even though he was not a trader @ P.S.S. I thought a lot about the above (live recording a trader's daily trading routine) when I was in the hospital and electronically hooked up to monitors including nurses/doctors coming in and out of my room in what seemed like every 10 minutes for about a month after I came out of a coma. Some freaky Twilight Zone type of stuff. P.S.S.S. The other issue is your use of signal calling trade alert rooms that you refer to as chat rooms. You can not mimic/copy/piggyback (replicate) someone's signal calls unless they are before the fact signal calls. Also, learn the difference between a chat room versus a trade room. You subconsiously understood that you were really in a chat room...not in a trade room. In addition, you can only successfully mentor in person if that's what you were looking for...mentoring and not signal calls. Instead, find someone or a group of traders to trade with in person...your home, office or whatever but do it together. wrbtrader
Yes. Paper trading will reveal what does NOT work. When a trader finds what appears to work on paper, he needs to try it out with real money, real time. Should trade small, as there are other "things" to be learned.
Nothing personal here & no ego from my side , just facts : in two months , you did as much trades, as i did, per day , for 8 months. And only now, after 18 months, i will go live, with real account. If you wan`t to play the game of numbers, please put in the numbers. Extend that to 6 - 12 months, 30 ~ trades per day, & then i salute you Also ; * try out trading at the opening * try out trading before markets closes * try out trading in pre and after hours * try out trading stocks with 5 000 daily volume, limit orders( what do you trade - idkn ) * try out trading stocks with 5 000 000 daily volume, limit orders * try out trading with indicators like MACD, RSI, Bollinger Bands, MA, MFI & etc * try out trading without indicators , just pure price action * try out trading in 1 min timeframe, 5 min, 15 min, 1 hour * try out trading with all of those timeframes, opened on screen at the same time * try out trading based on daily chart, weekly chart * try out demo that @Robert Morse suggested, also IB, TD Ameritrade,Das Trader Pro demos * try out cutting loosing trade at 2% - 3% * try out holding winning position, twice as long, as you intended at first * try out going long, on stock with no earnings yet and daily chart of downtrend * try out, shorting stock, that has growing earnings and daily chart of uptrend * try out, shorting a stock, that has BETA of 1, when economy is doing well * try out shorting bottom support line * try out going long at ressitance line * try out shorting, bottom support - upntrend line * try out going long at ressitance - downtrend line * try out wrriting a journal of your trades & reflect back on your entries and exit * try out , not to drink wine, when wrriting a post on ET. Oh, &, giving up is not allowed in this forum.
"You play paper trades, you win paper money" but it is good in terms of developing the other aspects, that are indirectly related to actual trading.
In general, if you have access to a good simulator you want to spend as much time on it as you can (or a good backtesting system, but that requires care for various reasons). I recall @Sig mentioning that military pilots spend 5 hours in a simulator for every hour of actual flying. Equally, someone told me that F1 drivers spend 10x more time driving a simulator than driving actual F1 cars on track (which in itself is practice).
And without emotional (psychological) risk. Further, not all simulators are free. Some require a subscription fee and most allow "do overs" when you blow up the simulator account...the allowed do overs increases the psychological risks that often setup a trader for a melt down in real money trading. Brokers should do a better job via only allowing someone to open an account if they pass a course with tests on risk management, leverage, position size management along with setting up account restrictions that forces the risk management rules, leverage rules or position size rules. Unfortunately, retail traders will still find a way to avoid tests by brokers if the broker requires a trader to pass a test via simply using a different broker that only requires your name, address, telephone number, email address, a few questions about your experience level and your SSN/SIN/INSEE (numéro de sécurité sociale) and some money... You can now trade. Heck, via your driving a car analogy...most places have laws that you must pass a drivers test before being allowed to drive a car legally and you must have an adult with you in the car...an adult that must have a legal drivers license if you're still in training (e.g. drivers ed class, government driving school). Think about this carefully, even professional traders on Wall Street are required to be licensed (pass a test) along with doing training (in person) programs with others at the same firm...all in person and even then there's a compliance office to monitor the situation while the person is employed at the firm. Plus its a payed job with health/dental benefits... Very different than what the typical retail trader has on his/her own. Essentially, this is the reason why professional traders will always have an edge over typical retail traders...too many of us believe we can bypass those increasing financial risks and increasing emotional (psychological) risks on our own from the comfort of our home resulting in most retail traders caving in at the first signs of problematic trading. The problem was worst for Tradesuperstocks because he was using a signal calling trade alert room although he didn't explain the specific details involving the timeline. Also, why was he looking for a mentor or using a signal calling trade alert room when he had performed so well in simulator trading ? My guess is that he was on his own (self learn) in real money trading...things didn't go well via the self-learn route as they did in simulator trading and he panicked when he saw the real money trade losses...resulting in him joining a few signal calling trade alert rooms in hopes he could make a little money while being mentored on the cheap side to try to make back the money he lost... That didn't go too well as he hoped and lost more money. Now he's wondering about the process of paper trading or if its worthwhile to go back to paper trading. I'm assuming he's talking about simulator trading and not literally talking about writing down trades on paper. If a trader is consistently losing money on his/her own even via a small position size...he/she needs to stop the psychological damage and financial damage via going back to simulator until the mind can recalibrate about what's really going on with their trading if he can not find someone to review in person (side by side) the trading...what he's really doing in his/her trading. Yet, if the trader does not believe in simulator trading after suffering consistent losses or catastrophic single day real money trade losses...then just stop trading and move on to something else. They can always try trading again in a few months or years down the road when they are better prepared to trade and they think they have their head on straight...not spinning around like that chic in the Exorcist movies. Movie not recommend during Good Friday, Easter Weekend nor Easter Monday...do not click on it to watch unless you've already seen it before. Joyeuses Pâques wrbtrader
That’s my take on it. Technology and order familiarization, though sim platforms like IB, Lightspeed, Rithmic, can actually be used for ongoing walk forward testing/simulations.
Couple of questions if you don't mind me asking: 1. What is your definition of a simulator? 2. What do I need to build a simulator? I have simulated stock price/behavior using random number generator to generate lognormal distribution, then added drift, added small perturbations here and there. Why? Want to see if I can find a filter to filter out the random noise. Thanks.