Paper Trading Goals

good point.

Is there a thread on your trading methods ammo?

Thanks

 

posted live in es journal over last 4 yrs along with others, strategy explained there in fragments,
basically a mean reversion trade , you avg in short on rallys, reduce on smaller pullbacks, add again raising your avg, reduce on pullbacks ,etc until you get a reversion, cover on the widest nips, deepest cleaves, wait for another rally
keep a maximum contract size of 60 and a maximum loss of 60k per month

Take your acct ,divide it by 12, your max loss per month is 1/12th of your acct,hopefully you are profitable right away, at that point your max loss per month becomes your avg monthly profit

 

Your goal should be to follow your trading plan exactly.

You should not worry about how much money you make per day.

What should concern you is does your strategy have an edge?
Do you have the discipline to follow your plan?

After each trade whether profitable or not ask yourself; did I follow my plan?

There are good trades with bad outcomes and trades where you don’t follow your plan that are profitable.

If you made a profit and didn’t follow the plan you are reinforcing poor practises and that will eventually bite you in the ass.

 

Thanks for your help.

So what you are saying is that: if my strategy is profitable and I stick to my rules/plan and be discipline, then goal is reached? Because if I have a profitable plan, the money will come, I just need to focus on being discipline like you said.

I am understanding this correctly.

 

Just some advise.
Paper trading is good for testing your method & strategy, but doesnot help you trade. In more detail, trading is all about controlling yourself, your emotion, as we are human being.
There are 3 human instincts we need to learn to control by real trading:
1. greedy control
2. fear control
3. revenge control which i just learned it and it costed me a lot of money, man like revenge and should revenge, but on trading, we should not revenge, and it really will cost you a lot of money, trust me. laugh

Good luck

 

Pretty much.

You use paper trading to find out if your strategy is viable.

You should have a set of rules that you follow. You will also find out if you can follow your own rules. If you can’t follow your own rules you will eventually crash and burn.

Paper trade with the same amount of capital that you will go live with.

 

Thank you noblehawk

You are absolutely right. Greed control and revenge control hurts.

Here is what I experienced and I am sure you can relate in regards to patience control and leads to overtrading and revenge

1. You see your setup starting to unfold in your favor.
2. Now you are waiting for your entry setup to occur
3. Bbbbuuuuuuuttttt, you are impatient and enter the trade without confirmation of your entry setup
4. Because you entered early with confirmation, you get stopped out.
5. Now you start the day with a loss of money and emotionly kicking yourself cause all you had to do was following the rules and be patient.
6. Now you can't focus on the next trade and try to revenge trade because you knew the direction was in your favor. Another stop out.

This is why I have 10 rules I read per day. And one of them is "the market pays you to be discipline, don't ruin the day cause you fail to follow the rules and earn yourself a loss"

i am learning that it is really is 80% emotional and 20% trading skill.

 

Thanks deaddog,

Its making sense now. So I believe I have a strategy (with a few tweaks here and there), but I am paper trading live to determine if I can be discipline and follow my rules. Its definitely a work in progress and continuously learning.

So my goals is to see if I can follow the rules, if I follow the rules, I'm suppose to be profitable per the strategy.

 

It is is easy to self-control and be with discipline when you do paper trading as you donot feel "anything" no matter lose or win.

But once you start to trade with real money, as human, trust me, you make mistake, definitely your emotion involved.

And losing money is the "must-experience" stage you need to take.

It is not about not to lose money, it is about how quickly you can correct yourself from your mistake or failure.

Trading is about how quickly you can correct yourself from your mistake, and how big you can maximize your win-trade.

So prepare to lose money first. laugh.

Dude, have some fun. Life is short. No matter you win or lose, when you die, you cannot take anything with you

 

I've had LOADS of profitable strategy's on Forex and they all worked for a while but ultimately stopped, so watch out for that.

Index's namely DAX seems to be a lot less changeable, thankfully!