Do Experienced Traders Still Paper Trade?

Paper trading can be used for equity curve money management strategy. When real account drawdown ≥10%, STOP trading real $ but activate demo trading until demo balance increases by 12% before going back to real account.
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I never really understood the idea of paper trading when you can simply look at past data and see how the strategy would have worked. Why not just start trading the strategy live, but using a very small size? At least having some skin in the game will keep it interesting.
 
I take your point - but in my mind it depends entirely upon how "new" and different the strategy is as compared to your current trade.

For example, if you are an ES scalper and you've never taken a spread trade or an options trade before, paper trading for some period of time wouldn't really have a downside.

ET180 said:
I never really understood the idea of paper trading when you can simply look at past data and see how the strategy would have worked. Why not just start trading the strategy live, but using a very small size? At least having some skin in the game will keep it interesting.
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curious if any of the winning traders here have ever reverted back to paper trading...
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First of all, EVERYONE thinks they are a winning trader. And the more they are new to the genre, the more they think they are a winner (or wins are owed to them).

That said, paper trading is only for getting used to a NEW platform, or testing when something with the interface seems wonkey.

For testing analysis, there is always MetaStock & TradeStation...
 
themickey said:
The market may be dynamic but there are core principles which never change.
It's been many years since paper trading and that was when I didn't know how to trade.
I use a system which could be used in any country, any exchange, any time and it need never change over time, plus it's very profitable.
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There is always room for improvement, always. Like i said, instead of trading improvements live blindly right away, it's best to paper trade them first to make sure they work. It's just what I do.
 
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Agreed, I try to avoid generalities when it comes to trading, but there isn’t really a negative per se to paper trading a new strategy.

JSOP said:
There is always room for improvement, always. Like i said, instead of trade improvements live blindly right away, it's best to paper trade them first to make sure they work. It's just what I do.
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Far better to put monies on the line, say risk $100 per trade. It would be far better as you have a real life trading experience. Learn from your mistakes, assuming you have a trading journal and note if you have an edge. If not, you are not going to make it. The experience will also, teach you how to manage risk on your trades. You have the added bonus of learning to manage your emotions since, you have real monies at risk. Paper trading, there is no pressure because you can lose 100% and not care. This is the cheapest way to learn how to manage your trades in real time without risking too much. Like a dry run.
 
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