From Reminiscences of a Stock Operator I have heard of people who amuse themselves conducting imaginary operations in the stock market to prove with imaginary dollars how right they are. Sometimes these ghost gamblers make millions. It is very easy to be a plunger that way. It is like the old story of the man who was going to fight a duel the next day. His second asked him, "Are you a good shot?" "Well," said the duelist, "I can snap the stem of a wineglass at twenty paces," and he looked modest. "That's all very well," said the unimpressed second. "But can you snap the stem of the wineglass while the wineglass is pointing a loaded pistol straight at your heart?" Paper and live trading are a world apart. You will see how psychology plays into this once you start trading live.
I think as a general rule it is recommended that you trade one position (or commodity, contract, etc.) for every 10,000 dollars you have.. guess that means you can only trade half a position? Seriously tho.. if you really think your ready (or just can't wait to lose your 5k) then just trade one position then close it out at a profit or loss and trade another one.. and so on.. report back in a week.
Blowing an entire 5k account that you could barely save up for is much more educational than blowing 5k in a 50k account. You get to feel the anxiety of your existence and gain respect for the market. I think paper trading only becomes useful after you have alot of experience and you know what the market can do to you. I find that I treat a demo account just as seriously as a live account now. It's a force of habit that I didn't have before I gained live experience.
In order to conserve capital try trading live for about one or two months and then go back to sim to fine tune your money management skills and trade executions; while on sim, you should always remind yourself of how you should handle certain situation if you were trading live. Prop shops starting with very little capital is the better way to go IMO.
When sim trading have one real money position on at any one time. Simply pick one at random and go with it.. helps ease the psychological barriers instead of being thrown in the deep end right away.
SPY May 2010 119.000 put (OPR: SPY100522P00119000) Last Trade: 2.65 Trade Time: 4:14PM EDT Change: Up 1.35 (103.85%) Prev Close: 1.30 Open: 1.93 Bid: 2.64 Ask: 2.70 Day's Range: 1.92 - 3.23 Contract Range: 0.88 - 10.90 Volume: 26,613 Open Interest: 290,210 Strike: 119.00 Expire Date: 21-May-10 Quotes delayed, except where indic ========================== wait for right signals and double your money 2-3 times a year -you couldve ambushed this if you saw this http://www.elitetrader.com/vb/showthread.php?threadid=197622 Easy money-trading isnt that hard, double a few times and thats it
i wish I knew what this really meant when I started! Over trading is ....I was traidng to cover commisions, thats over trading. HAHA Good Luck seriously. using 5000.00 to test the waters and see how things work is the wrong approach, i think. But how do you know what a plan is or over trading really means until you test the waters to see how things work.
As long as you realize that your post is pretty much the post of most people starting out, and also realize that 99% of people will wind up failing, and that your $5K will be gone pretty soon, that most of the responders here are also paper traders, then you will understand "what now."
The OP must also understand that TZ is a previously failed trader, who continuously discourages new traders from trying.
Well we all know that trading isnot for every one Only those who risk gong to far will know how far one can go The OP should realize that the $5K is is planning to trade he might end up loosing all