I'm glad you clarified exactly what I have been saying, you know... using exact quotes and all... New Traders: Paper trading is not evil. It CAN, however, be detrimental if it is use in the wrong ways. Learning how the market functions is the wrong way. Learning how order routing takes place is the wrong way. Using paper trading to figure out whether or not you can be successful, or profitable, is the wrong way. Take the path you want, but remember this... Police Forces = Don't shoot people everyday... unless they're in LA. Armed Forces = read my first post on this thread. It was implied that I have experience here, so I win by default... Oh, and I never had to actually shoot anyone, despite weeks and months of training. There is a difference in being prepared, and using simulation. All traders NEED to be prepared before trading live, most are not. Most new traders are also strait off of the simulator's baby bottle titty when they go Live and lose money. Look at the statistics of traders who win and traders who lose. 90% lose. How many new traders LEARN to trade on a simulator? Airplane Piloting = after learning on simulators, they spend many, many, many hours learning... IN THE AIR as a copilot. Car Driving = You're a jackass. Theater = See above. Dancing = See above the last one, then add a "retarded" in front of the "jackass". The entire occupation of a professional dancer consists of 95% practice and rehearsal. Is that in any way similar to a trader? Well, some people in this thread have already revealed themselves to be nothing but career paper traders, so... Boxing = Sparring... Ring a bell? ding, ding. Martial Arts, etc. = See last. Look, the idea behind paper trading or trading Live in smaller portions is to prepare to trade full time (or at least regularly). Practice does not make perfect. Perfect Practice does. The idea is being prepared, and you cannot be fully prepared by only Sim trading, due to rules a) through p), among others. Beginners: Have you noticed how many people who are for paper trading make no claim of having ever entered a live order? Are you going to take advice from some people who may have less actual experience than you? Be your own judge, but don't approach either side halfheartedly. When done properly both sides of the argument have their merits, but take caution to how the market actually executes orders and the damage successful Sim trading can have on your psyche when you do go Live. I wish everyone on ET success, and I just want to let the beginners know that I'm here for them. I didn't have people giving me advice when I started out, and I feel that by helping others avoid many of the mistakes I have made myself, or seen others make, I am giving something back. Good luck to all.
Ha ha ha. Now there's a man who really believes in what he's saying! Paper Trade vs. Trading Live/b] You've seen all of the arguments Pro & Con. If you've traded live you know Paper Trading can help you develop a system which has positive expectancy, but when you execute it you probably will experience emotions which hadn't factored into The Plan. If The Plan is good it will carry you through any potential drawdown into profitability, or you will realize your error(s) and go back to the drawing board. If you've Traded Live you know that there is nothing like it in terms of what you experience and (hopefully) learn from your trading. If you've got a winner, you know it (and somewhere along the way you will realize why they traders who fail, do). Ultimately, it's your money so you have to decide what, where, when and how you choose to trade. Best Regards To All, Jimmy
Your experience will not change Mr. Market. Your experience will only change you. Mr. Market will not change to suit your trading system. You need develop a trading system to suit Mr. Market. Beginners adapt their trading systems to their emotions. Experts adapt their trading system to Mr. Market. Novices will never learn from their own lessons. Intermediates will learn from their own lessons. Experts will learn from others' lessons. Novices rely on their psychology to win. Intermediates trains their psychology to win. Experts ignore their psychology to win.
I may officially retract some of my previous statements concerning you WmWaster, but only if you clarify how you see yourself fitting into the above quote. Who are you on this list? I myself would have to claim Intermediate for the channeling of my psychological emotions. As well as both Intermediate and Expert as pertaining to the education from mine and others' lessons. JimmyJam: Thanks for being a good sport. I call names on occasion, but only in a good-natured way. I just wanted to poke some fun at your Sim list. It is true that every single occupation on the list requires extensive preparedness, but that does not mean simulation is the only means by which they prepare. I wanted to point that out, and throw in a bit of humor too. No harm, no foul. As far as being right or wrong, each side has its merits. But the main idea is that being prepared is, by leaps and bounds, more important than having simulation experience. Many traders have Live trading experience. Most traders are not profitable. Having Live or Sim experience does not make you prepared. This is of course all connected, and I want to point out to the beginners that either path you choose has significant consequences for being unprepared. Choose one, choose both, but be sure that you can see the water below before you dive in. PS Thank you New Traders, and Inquiring Ones, for the PMs. Keep them coming. Like I've said before, I don't push a narrow minded approach. I'm not selling a thing. I'm here to help, so don't be shy.
THINKORSWIM has a paper trading system that's quite elaborate. Now let me tell you why you should definitely NOT paper trade. In options, you can take small positions (one or two contracts) and only risk a few hundred dollars per trade. If you actually dipping your toe into the markets, it provides a more valuable learning experience to actually make (or lose) 50 or 100 bucks here and there on very small positions. Once you get your "sea legs" you can increase your position size. If you're very new to options, paper trading is okay but futures paper trading as a starting point makes more sense because of the much higher capital requirements, minimum position size and leverage. A more important issue is knowledge. If you're starting out in options and futures, the best advice I have is this: If you think you need to read 2 books to understand options, triple that and read 6 books; ditto futures. The beginner dramatically UNDERESTIMATES the amount of knowledge he or she needs to be successful. Read, observe, ask people, then dip your toe into the market. Good luck and happy trading!
I'm glad you become calm again, 2manywhiners! I usually leave the person alone when it is furious. It's the best to both parties. Only time can cure one's emotions. Only if it's calm will I come back and explain since only calm people will open their ears. I'm glad to answer your questions from now on since I know you will listen now. First what's the use of a complete simulated trading. It's to: - help testing your trading methods/rules/systems - help testing your money management & position sizing - be familiar with your trading software and execution procedures (it's more important if you intraday) - be familiar with your decision making procedures & reaction (it's more important if you intraday) - simulate your psychology (the hidden values!!) Now ignore what I say about psychology first. Do you agree the above criteria are important as a successful winner and simulated trading can help you achieve all of them (except psychology)? If so, there's no reason why you need skip the step of simulated trading, no matter your status about psychology. So the next question is whether a successful simulated trading guarantee a successful live trading. That's the distinction between intermediates and experts. An intermediate has to go through live trading, learn from their mistakes, and grow up. It's nothing wrong but you need to spend more bucks before you win. An expert can avoid these unnecessary costs. An intermediate who needs to learn from live trading will somewhat follow the following stages: - They get the key towards success. They "understand" the danger of emotional trading. - However, instead of following their plans strictly, they involve in emotional trading as their start. They keep losing but they don't know what's wrong. Their emotions are getting stronger and stronger. - After enough real losses, they get too many pains. They sit down and ponder on their failure. They know how to win, but they couldn't. Why? - They realize it's their emotions which make them lose. What should they do now? They can't keep going on like that or they will be eliminated finally. - They stand up, swear and determine that they will never let their emotions screw their well-thought plans up anymore. They get out of emotional trading WITH NO EXCEPTION - They stick with their well-thought plans religiously ALL THE TME. They win at last. Don't you feel what they do is similar to the following case? People have told you already the danger of smoking. You know it. But you smoke out of curiosity when you first encounter a cigarette. You seriously affect by smoking and your health declines. You now sit down and realize how stupid you are to smoke. You swear and determine you can't smoke anymore or you will get all sorts of illnesses like lung cancer. You get rid of this habit and become healthy & refreshing again at last. Emotions are like "smoking" in trading. If you follow your emotions, you are destined to lose. Following your plans strictly is what you need to do. That's simple! There's nothing more you need to do. An expert will simply do the following: - They get the key towards success. They understand the danger of emotional trading. - They stick with their well-thought plans religiously ALL THE TME. They win at last. They have spent enough time to prove the validity of their trading system. They know they can simply succeed as long as they stick with their plans. They know more than enough how bad emotions are. No hesitation! No worry! No greed! They don't need to see how their emotions spoil their trades before they grow up. They won't "smoke" when they're trading. If you compare between the 2 stories, you will see what intermediates and experts do are exactly the same, except that intermediates do more - the italic part. They just need walk through the wrong way before they know where to go. You may try to think in this way: Most traders are losers, so does it mean trading is not profitable? No, definitely not. One can consistently win in long run. Trading can be its full-time job too. The same applies to simulate trading. Some people may regard it useless or not helpful, so does it mean it is useless / not helpful? No, definitely not. Most new traders lose when they first trade, so does it mean new traders must lose? No, definitely not. Why do people lose even if they have sim trade? That's easy. You may ask similar questions for other things too. Why do I lose even if I have a trading plan with me? Yes, you lose because your trading plan suxks! The same applies to your sim trading. Your sim trade suxks! That's why you can't get full benefits from sim trade. People commit all sorts of mistakes when they sim trade. No wonder they will lose when they trade live. You can win only if you know how to sim trading and so get useful sim trading experiences, NOT if you just sim trade, no matter how you do your sim trade. As to how to sim trade correctly, I have explained all these in my previous posts. so do yourself a favor and read back. Don't you think we are doing all the same? Do you think we get paid for these posts? Last but not least, I think this question is most concerned by you. "Did you gain just after your sim trading?" I'm reluctant to answer because I know you cannot gain by a straightforward answer. I wish you can understand and judge based on the descriptions, reasons & explanations I offer, not just a simple answer. You can't learn from it. You might even fail since you have no faith/understanding on it. It's like you'll probably screw things up if I just give you the secrets of trading straight away. If you see & understand my way of sim trading will lead you to success, you will follow religiously and follow successfully. But I think you wish to know now because you can't judge based on my explanations, or you need some confirmations. Then I can tell you: "Yes, it's what I did, and how I succeeded for the very first time I trade with my first trading methods! New traders, you could do the same as long as you know how to sim trading in my way!" If you have any question, feel free to ask. Best regards!
I repost as I have modified some of its contents. ======================= Your experience will not change Mr. Market. Your experience will only change you. Mr. Market will not change to suit your trading system. You need develop a trading system to suit Mr. Market. Novices adapt their trading systems to their emotions, & no more. Intermediates adapt their trading systems to their emotions, & adapt their emotions to Mr. Market. Experts adapt their trading system to Mr. Market, just straight away. Novices will never learn from their own lessons. Intermediates will learn from their own lessons. Experts will learn from others' lessons. Novices rely on their psychology to win. Intermediates trains their psychology to win. Experts ignore their psychology to win. =======================
That's easy. It's when a person realises the importance of revision and starts to review his past trades, learning from its mistakes. At that time it becomes an intermediate. Probably I should change the statement for less confusion: ======================== Novices won't learn from their own lessons. ======================== This looks much better. "Never" has an implication for the future.
Just keep posting. I'm going to start making weekly backups of this thread (starting now). This stuff is too good to just leave here. Best, Jimmy