Fearless trading

Quote from Johnnie T-Bond:

Paper trading can be useful in developing a profitable system in theory, but as most of us should know, few of us traders can follow a proven system religiously in actual practice.

There are lots of good systems out there that could make most traders millionaires IF THEY COULD FOLLOW THEM. Many traders have trouble handling uncertainty very well so they second-guess their systems and either miss the opportunities or dump their profits too soon. I think it is important to trade with real money as soon as you think you have a proven edge or system and not waste too much time with paper trading or over-optimizing.

Good systems are often simple to understand. I think it helps to start small, keep your expenses very low and go for smaller, consistent profits in the beginning. Once you master the technique and get used to trading consistently, start SLOWLY increasing your position size. If you try to grow your position size too fast your sub-conscious mind will lead you to give back a lot of your profits. This is because your equity will grow faster than your sub-conscious financial self-image and the resulting TENSION will make you do lots of dumb things to make you correct back to your smaller self-image by donating your money back to the market for you automatically. I've seen this happen countless times to traders who try to up their size too fast, despite the mathematical ability to do so. It takes time to methodically increase and hold your position size, which is the key to really big money. Most of us can only adapt slowly. There are very few Tom Baldwins out there who can take quantum leaps in size and hold them. Paper trading does not develop the kind of mental toughness one needs to make big bucks.


Solid achievement gives a trader real confidence, where paper trading does not.
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Helpful points Johnny-T;
especially the last one.

Actually agree with starting small;
which is certainly true with papertrading, then realtime money.

And have had papertrading keep me out of some things which didnt fit me.

Also papertrading can help learn a new contract, stock;
very true your guts know the difference between pretend money,
& realtime money. Important difference.:cool:
 
To me "fearless trading" means you have actually accepted the risk on every trade. Meaning no second guessing your strategy.

Let them trade where they may
 
One thing that helped me early on was this: I began to look at trading as placing a long series of loaded bets instead of trying to win the next trade. If you are rolling loaded dice, it doesn't matter which individual trades win or lose, because you KNOW the protracted series of trades will make money as long as you follow good money management rules. If your system or method or market feel is consistently profitable over time, you can say to yourself with authority; " I know how to trade and I am not afraid." If you were rolling loaded dice that are set to win , say 83% of the time, how could you possibly be hampered by fear? You would roll those dice until your arm fell off and collect the money. What is hard for many to visualize is that trading a proven method or system is exactly the same. I can take a long time for some traders to reach the point where they truly believe this. When you finally reach this epiphany, trading becomes easy, fun and profitable and your fear is no longer a major factor. You can then focus on operating your system and making money. You can, as my old boss Tom Dittmer used to say in the mid 1980's, "Have fun and make lots of money."
 
Quote from Johnnie T-Bond:

When you finally reach this epiphany, trading becomes easy, fun and profitable and your fear is no longer a major factor. You can then focus on operating your system and making money. You can, as my old boss Tom Dittmer used to say in the mid 1980's, "Have fun and make lots of money."
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I read this and it's like seeing my path leading to where I am at the moment. I have always been surprised at traders saying that trading is not fun, but a serious occupation, blah blah blah, I love trading, I could do this all day long (if I didn't have a family). You definitely have to enjoy what you do, you can't simply be driven by the idea of making money, it's absurd.
 
I think papertrading, then graduating to small sizes is best.

Paper trading allows for system to be proven profitable to the trader.

Then going real with small amounts is a great way to get your feet wet without losing your shirt.

Stacy
 
Most trading systems transfer to the various instruments with minimal adjustment.
Besides a demo account — available with all fx brokers, one can trade as little as $1 with Oanda.
The suggestion — open a trading account with say $10 or $100 margin, trade whatever % of that amount, test one's methods/systems and learn how it feels to risk real money.

https://fxtrade.oanda.com/

"No account minimum": http://fxtrade.oanda.com/whyfxtrade/
 
Quote from dandxg:[B

Going through this process now I have found a way to make consistent money on the ER2, no I am not soliciting, but let's see how I do in about a week when I go back to live with this new method.

I am thinking about just putting in my targets and stops on NT and get up and walk away or atleast stand back from the mouse. I find that being new, I psych myself out and get out of winning trades watching price action with little profit. Most of the time over 70% it goes to my target.
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Are your stops/targets being held natively or at your PC/ Server?
 
Quote from Johnnie T-Bond:

Thanks. It' s been my experience that one should risk no more than 2 to 3 % on any trade, no exceptions. Take a quarter and flip it 100 times and write down the results on a sheet of paper.

Start with, say $ 100,000.00. Use your calculator percent key and subtract a certain test percentage for every "tails" you flip. Try that experiment with 2%, 5%, 10%, 25% and 50% losses each time a "tails" comes up. You'll soon realize how crucial money management is! You'll also see how easy it is to blow out your account when you hit a series of bad trades if you take large risks! If you consistently take large risks, you are destined to blow out. It is mathematically guaranteed over time. I believe that risking no more than 2 or 3% is a major factor in surviving long-term, let alone earning a fortune in the market.

It also gives you fearlessness to trade on through a series of losses. You must protect your capital above all else or you will become easily demoralized. Once that happens fear commandeers your mind and your confidence to pull the trigger is greatly diminished.
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Good suggestion, especially risk ''2''
THEN '' try...10%,25% ''simulated, or paper, NOT realtime:D

Sounds like Johnny T, you have a market maker/high frequency trading style, especially with your ''scratch trade ''example.

Position, chart trading intraday, prefer profit or loss;
they usually are profitable, even if they drawdown[loss temporarily ]some.

Actually if more of us had followed your helpful risk suggestion above;
less pain, more gain.

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:cool:
Still find that helpful to cut back quick with a loss, my losses tend to trend also;
usually trend had changed is the first way i find that out, for sure.

Welcome back Indahook, meant to mention that earlier..

And while paper trading could interfere with some trading styles;
my paper trading is helpful for aggressive trading/questionable trading & that kind of paper trading almost always isn't as profitable , like today, most anytime, as real time trading today.

Figure another reason BOT,CME OXPS,ISE,TRAD are so profitable;
even entry of questionable,aggressive trades is fun , but not profitable for me/many others;
papertrading solves that need for action.

A top trader in Schwagers books solves that problem by trading questionable smaller ;
a cheaper way for me is paper trading for questionable trades.

Your experiment of position % risk is one of the most helpful;
dont know why most of us ignored that starting out.
 
Quote from hardyards:

Are your stops/targets being held natively or at your PC/ Server?
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They are being held naitively. Your PC is never reliable enough in my mind to leave your stops on.
 
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