Did paper trade really help you to become profitable?

I have noticed a direct correlation between the length of time a client takes in seriously paper trading with me (and reviewing with me one-on-one) in great detail the trade entry and trade position management - with that client's success live trading with the trading system.

 

You can’t completely eliminate random noise. You’ll always have some turbulence, and the filter you’re looking for is the golden goose. Have you tried working with ATR, or STD (not HIV or gonorrhea)?

In my experience, and success, what separates a good signal from noise is the average win size, not the rate, and the only way to get that, is by not constantly choking off your profit, and in most cases not seeking profit targets at all.

 

@Sig mentions a lot. It’s like reading tax law

 

I could not believe how fast money can be burnt in real trading. Lots of good advices in here. I am gonna take it very slowly now .. Even slower and trying to find a strategy that works, then implementing it with risk management. Will see

 

Amen.

 

Don't paper trade, just start off with small positions and work your way up.

 

In my mind, trading 1-lots is the same as paper trading.

I have several new strategies where I am targeting pnl volatility of 5-10k a day - practical purposes that's paper trading (for me, given the scale of other things I do) but I do get to participate in the order book so there are no simulation-driven artifacts.

 

Because you forget what it means to only have $25,000 that might have taken you years to save. A 1 lot in ES can easily cause losses of $500. Soon, while trading leveraged products without a plan, you can easily watch your account drop to $5K which can then take years to save again. I've seen it happen.

 

True that. I'd think for someone with that little capital the progression should truly be paper trading (or backtesting) and then micro-trading (with real money, but targeting "painless" volatility levels). Only then they should start scaling up.

PS. My rule of thumb on scaling strategies is that I am ok doubling the size over a period equal to year/sharpe^2 (so if have a strategy with a Sharpe of 2, you'd double the size over 3 months etc).

 

Took me 8 years to build up 50K capital to be in market... Burnt 15k in just a week... I am still hurt at this point. Big difference when papertrade vs real. Strategy is the same... But I am way more relax when it's papertrade