I would say protect your capital never put your account in a position where a single trade can blow it out. Protect your profits don't let them become losers. Cut losses using prearranged stops. Write a trading journal and monitor what works and what does not work. For trading strategies there is plenty of info out there you must develop your own style and know what is working and what is not.
Gamble on calls or puts. Even if you blow your account trading your trade plan, it will not help you. Look at me for example. I blew up 2 accounts and am not an inch wiser. The people who say that blow-ups make you learn are stupid. It's like saying with same analogy as earlier posters, taking a bullet to the chest will make you appreciate life more. Well thats obviously true, but WTH, you almost died!! I stand by what I say. Which, you need 500k to make 100k a year (20%) which is reasonable. If you don't get 500k leverage with prop firm then dont "trade" the 5k, but gamble it. I seriously think gamblers can make more money then traders, when it comes to capital as small as 5k. Blowing-up 5k is only a good decision if you decide to become a trader for the next 10 years. 10 years is a lifetime. Its like deciding whether you want to be a garbageman for the rest of your life. And if your young a decision you wont be able to make wisely. Actually, nobody will be able to make such a decision. Otherwise its much wiser to invest the 5k until you grow to bigger amounts like 50k. Trading with 5k is suicide unless you "trade" into a short in a bear market, where theres chance to make 1000% in few weeks. We are now in a bull market, no fast profits are really possible "trading", so you have to gamble IMO.
You should not gamble until you have real experience and have all ducks in a row. Then you could take a higher risk. But I still think you should not risk it all becaus eblowing out an account is demorilizing. You should not think of it as a gamble. If you do go to the casinos and have fun. This is trading and you should be utilizing your skillsto make good trades. You need to know what those skills are.
these are important questions, as well as: have you factored commissions into your simulated calculations?
I am a new trader too. Don't let anyone discourage you. You have read a lot about how to be a displined trader. For starter, you need lots of screen time and study your trades and setup-back test. Sim trading is very critical but is has be treated as a live account. With 5K you can trade Dow mini future. That's what I am Sim trading now. I only trade one contract and slowly add one more. I am only investing 5K too. Only focus on one market, one or two set up, one or two patterns and master them! Don't over trade. Make sure with all your set up and plan , you can be consistenly profitable for a month. Then take 25% off the result, it will be the result in your live account! 5K must be mentally forgotten from your account. You will never be successful if it's scared money. Good luck!
Great Answer!! " The way to make money is to KNOW your going to make money BEFORE you start " Excellent , this the key for consistency Thank you
The OP must realize Kass is a mentally deficient simpleton that spend his youth locked in a dark cellar, with only urine for food. He got started in trading by reading Trading for Idiots, and now is ready to progress onto paper trading. Now, back to the thread.