Switching from papertrading to real money

Discussion in 'Professional Trading' started by tatsimon, Sep 21, 2005.

  1. Hi,

    I have had 4 months of profitable trading (globex currency futures). I have had set backs but account consistenly went up.
    My system will be automated with clear entry/exit signals so emotions not a factor.

    Is 4 months enough time before switching to real money?
  2. Tata,
    I'm glad you had good success.
    but if you have to ask..?

  3. johnab


    Fake money is a different than real money. Orders are filled differently
  4. Trading Bubble...
  5. coolweb

    yes I have had success.

    but having success for a few days/weeks isnt enough to switch to real money

    As we all know, market movements are cyclical. I have tried same system on 9 markets, profitable on all 9, some more profitable than others.

    So is 4 months of success enough?
  6. Choad


    You only need to paper trade a short while IMHO. Just a few trades to try some things and work out a few bugs.

    Other than that is a waste. Until you have real money working and real gaps/bad data and real emotions to deal with, you are just pissing in the wind.

    Better do just the minimum trade size tho. And even then, I'd bet against you. Why? The huge majority will fail.

    If it was at all easy, everybody would fire up their little Tradestation or Wealth-Lab system and be rich. Doesn't work that way. Sorry to be a Negative Nellie, but there are a lot of starry-eyed newbs here lately.

    Time to inject some reality.

    Good luck.

  7. As long as you can afford to lose your trading capital and you've given your money management strategy just as much consideration as your entry strategy, why not give it a try with real money?

    I would recommend keeping your size small. Trading a single contract can generate plenty of profit with a good system without exposing yourself to significant blow out risk. Don't bump up to five-lot trades just because you had ten one-lot trades go your way. Let your account size, not your success rate, determine your size. If your real success is an order of magnitude less than your paper success, then stop real trading, take a break, and head back to the drawing board.

    I think people on ET have good intentions when telling new folks to keep paper trading forever, but paper trading can only take you so far and everyone learns/improves at a different rate (some might take years to become profitable, other only months). In the end, there's no fixed amount of paper time that's appropriate for every trader.

    The above is just my opinion. I hope it goes well for you.

  8. Choad, I am not the huge majority, I am not a "starry-eyed newbs", I am tatsimon. I never said it was easy and I never mentioned getting rich. U can bet against me if u want, but from the looks of things u will lose big. Its your choice.

    Maybe I should rephrase the question:

    How long should one test a system to check if it withstands the different cycles (trendy/choppy/volatility/etc) of markets. Is 4 months enough?

  9. Firstly, You are asking a reduandant question. You understand the cyclical nature of markets yet you fail to see that what works one day may not work the next. Time is irrelevant in any systems' effectiveness. Macro/micro events may in fact be cyclical yet market reactions to such events are contingent on too many factors.

    Second, paper trading is worthless IMO. Only years of real trading will get you there. Figure out how to manage your money and survive for two years and you have a good chance of developing a successful stategy.
  10. Choad


    There you go!

    Stay tough. Stay focused. Trade small for as long as it takes, but do real trades. Here's what I do. My autosystems trade very small at first. Then as they slowly build profits, I add to the size. When I have a profit built up that is near the average drawdown, and my system seems to be working as the backtests indicate, I jump size up faster. Sometimes it bites me and I have to drop size back down to the minimum, but the psychological value of not risking "starting" capital is worth it to me.

    Make sure you have enough capital to take an extended hit without it making a serious dent. Hint: you will need more than you think.

    And...NEVER give up!

    #10     Sep 21, 2005