To me, the willingness to take loss is also within psychology field. Anyway the classification doesn't matter much. Use any wording you like. No one ask you to utilize all your leverage limit. No one forces you to do. Why do it? You can just buy 1 contract even if you can afford buying 10 contracts at max. Le me ask you, if someone says I need to take out your $10k first, then I'll return $20k in future. Will you accept the deal provided that it's genuine? The same concept in the above case can apply to trading too. If you know, after considerable research, that your methods/systems are profitable, why fear to take losses? The losses are just temperary. You will get back all and gain more in long run. Unless you hate money, there's no reason for fearing to take the so-called "losses". Another example of psychological flaws.
How about opening a real account but just do simulated trade? Even if you need to pay fee, the fee is worth its dollars. The small fee help you to prevent the bigger losses you could have paid when you traded live as a starter. Well-worth, I could say.
I understand that a lot of traders lose $ because of their emotion, and psychological issues. However, I think if you can't make $ with paper trading, there is no way for you to make $ with a real account. Set-up ( your edge) + emotional control => profit You need both. I am using a two-step approach to learn to trade: (1) I would like to find out my own edge before I start my second step. Trade with simulated account and be profitable. (2) Trade small with a real account and be profitable. It might take longer than traders who combine these steps into one. But the market is always here. Why rush?
Some people just don't get it... How many of the people posting on this thread who are AGAINST paper trading are also claiming to be full-time or dual-career traders? How many of the people posting on this thread who are FOR paper trading make the same claim? More. Less. Many of the people claiming that paper trading is a great way to learn all about trading, AREN'T TRADING. They're paper trading. (or sim trading. Whatever you call it, I call it shit.) Many of you Paper Street Soap Company advocates haven't yet figured out why so many brokers offer FREE simulators. It's because they want you to try their product. The programs always give you fills instantly, and at the best price (a lot of the time it's an even better price). When you want out, guess what? Instant fill. Never a partial. Never. These programs aren't designed to help new traders. They're designed to SELL PRODUCTS meaning, they want their platform to appear perfect, even though the market is not. Psychology isn't the only problem new traders face when going Live. It's just as much platform function, or better put, dysfunction. When new traders first go live, they find out that: a) fills aren't instant. b) limit buy orders are rarely filled when and how you want them filled. [That is, if they even fill at all] c) market buy orders are never filled at the bid. d) partial orders suck, and they happen frequently. [with mid-to-large orders, or volatility] e) when you want out of a falling stock, people aren't always there to buy the first instant you want out. f) simulators don't charge margin fees. g) simulators don't have margin calls. h) simulators don't charge exchange fees. i) simulators don't charge broker fees. j) FREE simulators don't charge platform fees. k) simulators don't have mysterious charges on the bill. l) on occasion, data feeds go whack for no apparent reason at all. m) simulators don't require calls to the broker because the platform crashed ["Sir, it didn't crash, it's just down right now." Try making that call a polite and courteous one when you can't enter a sell order and your position is still open on a stock that just broke news you haven't read yet because you're STILL on the GD PHONE!] n) simulators rarely require the usage of antacids. o) simulators aren't begging you to wait just a little bit longer... and lastly, p) SIMULATORS DON'T MAKE YOU VOMIT!!! Paper Traders learn these same things when they go Live. However, they've spent days, weeks, months, or years formulating a trading plan based on a market that doesn't exist (at least not as they know it) and they almost always seem more reluctant to embrace the market's inefficiencies. Even then the ones that eventually "get it" have to unlearn even the basic functions of the market, before they can move forward. Want to know one of the unwritten rules of trading? ALL new traders lose money. Some lose dollars, some lose accounts. But ALL new traders lose money. period. If you're too afraid of taking losses, especially the ones that are just a natural part of the growing pains of trading, then you are in trouble no matter how well you "plan" to trade.
"To me, the willingness to take loss is also within psychology field" trading is more about risk management than stock picking, so the distinction between papertrading and real trading is hyooge again, i don't HAVE 100k to risk. and the risk of losing the entire amount of 100k is hyooge if i maxed out my contracts with max leverage with Nat Gas, Nikkei, Gold futures, etc. so, while it's groovy that i made 500%+ return in 3 weeks in my papertrade account, it does NOT have much relevance to my normal trading. because a rule of trading is that you CAN'T trade if u lose all your capital heck, i could give you several trade strategies that could net over 1000% return in a week. EASILY. but the risk of LOSS is too great to make those viable in papertrading, you are not gonna get accurate results unless you use the same systematic methodology that you will use in real trading. i HAVE a systematic methodology for my futures scalping, so i found papertrading relatively useful. but in and of itself, without those caveats - it has little relevance
i still dont use 10% of my buying power in any one position and it still takes all of my ballz to use 6%! paper trade, then size DOWN DOWN DOWN, then size up ever so slowly
i used the DIA's to learn how to trade YM unlike papertrading, it was REAL. it's just that for every point move in the dow, the dia's move $1 (per 100 shares) vs. $5 per point for YM. so, this is a nice way to practice your YM strategies with an instrument, that while it is not a fungible one for one proxy, is so exceptionally close as to be essentially the same (thanks to arbitrage) also, YM has better fills than DIA, so if your strategy works on DIA, it will work on YM
This I agree with. It wasn't paper trading as money was actually on the line. I think that was a great idea for practice. It doesn't matter how small the cash is, just as long as its real. Then just scale up.
Not going anywhere for a while? Grab my Snickers. This is exactly what I've been talking about. Just curious, how long have you been trading Live money? (and I don't mean investing in mutual funds or ETFs) How long did you paper trade before going Live? Were you comfortable while trading on the platform you simulated with? Are you more or less comfortable while trading Live? (I'm going to assume the answer here is less) Do you know why you're uncomfortable with trading even 7% of your capital on one trade? Re-read my last post. Now, guess. I'll give you a hint... You were comfortable with the simulated account. It gave you a warm cushion of support. A nice soft cushy pillow. Then you went Live. It's like using a log for a pillow, while you're in a tent lost in the woods with nothing but two friends and video equipment. Seem familiar? Boo! Simulated accounts make newbies comfortable. Comfortable newbies almost always stick with the platform they learned on. It's a security blanket. Brokers know this. That is a major reason they've design their simulators to trade the way they do. Wake up! And can I get an Amen for the last post? C'mon, where's all the traders with experience, the ones on here to help keep beginners from making the same mistakes some of us made? Surely I'm not the only one...
my + trade rate is about 70% i am currently sizing up... i am net positive to the tune of 5.2% since live and that includes all commissions and all mistakes since day 1 this includes some huge mistakes that have been covered, and some HUGE winners that have filled those holes i have another job and i am in no hurry i worked on Wall St. for 6+ years and have studied the markets for YEARS before ever going live with an account like i have now i have backers i was a daytrader for 8 months in 2000 i have a lot of experience and i will not size up or down from this point - i am exactly where i need to be. point of inception is 05/03/05