I like your posts Handle because they are so real. You capture very well the mind of the beginner trader.
But I still have to disagree with you on the long term trading aspect and you make a point above that I think shows this. When you talk about the stress of real time because it reduces memory, like a deer in headlights, I think this is exactly why a trader has to see this initially for himself, in real time, and perhaps even over and over again in the span of just a day or two. If you're swing trading, I think the memory shouldn't be an issue since you have lots of time to look up your chart patterns of refer to your trading plan. But if you do take a few losses in a row, but they are days apart, you won't react the same. Your body won't remember the pain as well. Now granted, the point isn't to feel the pain of the loss since a loss shouldn't affect you at all, but if these trades are far apart, the effect of the loss will diminish in your body, which makes it have less of an impact, which maybe makes it seem less important, which therefore perhaps makes problems not appear as soon as they might in day trading.
I don't doubt that there are benefits to long term trading, and as you say, commissions is a big one, but I still don't think that trading long term will allow a trader to become a real trader faster.
Your point about 19 out of 20 winnings days though is another thing that doesn't sit right with me. I'm not sure how 19 out of 20 winnings days fits in with a win percantage on trades, but it would surely be very high. To focus on getting this win % so high before you get off of SIM will, in my opinion, also delay going live, and if you delay going live, you delay seeing what your actual problems are. You of course don't need a high win rate to be profitable given the risk:reward ratio used, but by forcing yourself to not go live until you're essentially a super trader will have its own drawbacks.
I remember a trader on here, Lescor, who I think lots of people respected I remember that he would share stats from his trading. Here is one post I dug up.
http://www.elitetrader.com/et/index...ut-day-after-day.187730/page-104#post-2910723
winning days 93 (65%)
losing days 51 (35%)
$ sum winning days $850k
$ sum losing days -$323k
daily profit factor 2.6
We see that his winning days are only 65%, which is much less than 95%, for 19 out of 20, and yet, he is still highly profitable. What's also interesting here is how much money he loses in comparison to how much he makes. This post was from mid year, and it seems like he is up about 500k here and finished the year up about 800k maybe.
My point is that if you focus on too high of a target for SIM trading, a trader will never go live, and see for himself what other problems he might actually have. Also, by focusing on such a high win rate, you really miss focusing on consistency. Even 50% winning days would be fabulous if your winning days make 1k and your losing days you lose 0.5k. This strategy would lead to very nice profits over the long term.
I don't know the experience you have, but your responses are exactly answering my thoughts of what is best in my thoughts.
"If you're swing trading, I think the memory shouldn't be an issue since you have lots of time to look up your chart patterns of refer to your trading plan."
Most newbies can't start their discipline and train to adhere to rules, going from weekly to one minute bars will get destroyed, accounts go down. Long term have this time to prove to your subconscious you can trade and adapt to what you see, just cause you might not have many signals each week, you should be doing paper trading on 10,000 stocks to get your needed 10,000 hours of screen time.
Except for last five years when I hired staff, long term profits were 80% of my 401k, and day trading was 20%,
BUT I spent ten times more time on day trading to get that 20%, at some point it became of a matter I will over come my internal problems of mental short comings, and that and other reasons why it took me so much more time than some of the others like NoDoji and Redneck. I also think starting day trading in 80s might have also played a hand as very little out there for reading material, and I think even less than now were profitable retail traders, you were like at least a minute behind of calling broker and him calling the floor to get fills. I have many shortcomings even now but not dealing so much with mental issues, I have never had or presently liked going with the trend, risk is highest and losing percentages greatest, and back testing I have done said scalping shown much more consistent profits than homerun trades, so I lack what it takes to stand "pain" of any kind for day trading, but long term commodities, I am the opposite to a degree, I learned ways to not have much pain of positions going against me, I learned ways to reduce overnight margins when they the highest, I learned when never to have protective stops on, learned many nuances, and not until last five years have I added to positions and lengthened duration of trades. And if you looked at those who have most wealth in USA, they are long term traders.
I can't speak for those who have well back tested Trading Plans, but most newbies are don't, and about the only way one can control losing is rigid rules of showing yourself being 19 of 20 days profitable in sim, but then I am a scalper, I take 5-40 trades in 75 minutes, when I make profits too fast right after the day sessions opens, I am forced to be done, this comes from 14 years of tick data back testing/real time testing. The more you can break down stats, better you can manage your trading.
I use to be a vendor some years back, I charged an insane amount to teach people how to day trade, and I would take 100% of my fee from their profits after they signed away their life contract. And they never be allowed to real time trade till they were 19 of 20 cause I needed them to come out of the gate being profitable. Those who didn't show promise I dropped after six months and my time with them was approx. 2 years. I had them working their asses off when they were not simming, and even with all my time, I only had 40% profitable traders. Those who I taught long term trading, I had 90% profitable trading and few after few years took day trading and were profitable there as well. They had the time to memorize S/R, chart patterns, quizzed to death to questions of something happening.
When Lescor posted, was he a newbie or well experienced trader? Since you do or don't know how he traded, did he average down on trades? Like a year ago, had a day where I was still ave down 8 levels plus original entry, I had 16 plus one tick trades and all went against me 4 to 8 ticks and all I got out plus 1-2 ticks of original entry. Now most newbies would for one gotten out at where they got in and called it "Breakeven" but really that is a loss cause of fees, and some would have taken full losses as they got married to losing positions, but that was one of my largest profitable days for sixteen trades.
"My point is that if you focus on too high of a target for SIM trading, a trader will never go live, and see for himself what other problems he might actually have. Also, by focusing on such a high win rate, you really miss focusing on consistency. Even 50% winning days would be fabulous if your winning days make 1k and your losing days you lose 0.5k. This strategy would lead to very nice profits over the long term."
To me, you are actually agreeing to what I say, but you might not think so. And for newbies who spend more time making up entries and not time spent to the right of current bar, unless you see patterns of S/R, triangles, trendlines, one to 10 bar patterns and here is huge advise, you have to go back into time looking for these same patterns that you won't notice in sim or real time, and if you can't show me in sim what you need to do or how and why to pass on good signals, you will do poorly in real time. I have found that most newbies are 2 trades a day too much, meaning if they are able to not take two trades, they be profitable. Most new traders, and often times being mentored mess up the first week of real time, fat finger trades, chasing, missing trades, but by 2nd week, they doing much better of the ones who succeed.
I can only go by what I have experienced between co-owning a brokerage, instructing and my own trading experiences. I wish I could do homerun trades in ES off small time frames, but I don't want to even try as testing does not prove it for me and don't want to sit here all day, it is simple a business for me now, don't get much kicks out of it. I love to back test to see if I can get losing percentages down even more.
