How long should you paper trade before trading with real money?

Quote from JeffUSA:

I am paper trading two systems I have developed and both are doing good after a month. How long do you think I should paper trade them until I start using real money? Any good free or cheap software for doing backtesting?
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Viewing paper trading as a ¡®step¡¯ in the learning progression and transition to real money trading, it is critical that you only trade exactly what, and how you would trade with real money. Don¡¯t allow yourself to turn paper trading into a game, because there is no risk – the risk of making bad habits that you can¡¯t correct is tremendous, and will circumvent any attempt to trade real money.

I guess you begin trading real money when you are 60-70 percent proficient with your paper trades. When I say proficiency I meant to say that instead of focusing on the common metrics, such as win: loss or win size: loss size ratios, be more concerned with the win size: potential win size ratio, and maximize this percentage to the extent that it's possible.
 
1. Are there sufficient rewards to warrant your risk?
2. Are you confident you can fund and manage draw down?
3. Are you able to withstand and absorb your maximum loss?

4. Are you able to attract investors and trade their money with no skin in the game?


You need to say yes to the first 3 questions with conviction before trading any of your own funds.
A yes on #4 lets you roll it out any which way you want period.
 
TraderZones is a Troll ... on ignore by many people including me.

A thorough pro backtesting can suffice if you have experience and 30 days Sim Trading.

Then easy does it.
 
Quote from autowealth:

1. You do lots of backtesting.
2. You paper trade and get good results after a month.

How long do YOU wait before using real money (w/ an ATS)?

Are you thinking some profound insight will magically appear
after steps 1 and 2 above (from another month of simulations)?

Drew
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No, 30 days of trading is not statistically significantly. That is what is lost on "unretired".
 
Quote from JeffUSA:

I am paper trading
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my opinion is papertrading is goof for nothing exceopt to become familiar with your trading platform...with demo trading, your hands do not sweat and there is not psychological aspect to it at all...I've found to trade with real cash...albeit it small at the beginning is better that months, years of trading via demo...because no real cash on the line...I am sure many will agree with this
 
Quote from increasenow:

my opinion is papertrading is goof for nothing exceopt to become familiar with your trading platform...with demo trading, your hands do not sweat and there is not psychological aspect to it at all...I've found to trade with real cash...albeit it small at the beginning is better that months, years of trading via demo...because no real cash on the line...I am sure many will agree with this
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Yeah ... sweat, stress, worry and adrenaline is pretty hard to fake.
 
Quote from unretired:

Yeah ... sweat, stress, worry and adrenaline is pretty hard to fake.
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exactly...no money management needed with demo...lose it all...just email your broker rep to re-set to $50,000...yeeeeeeeeeeeeeeee
 
I never traded on a sim account before going live. I got a in with a good prop firm and was live from day one.

I do think a sim account is good to get the hand of the platform, software, some general trading concepts though. Never a bad idea, but limit your bp and trade as close you can with a real account
 
Back testing is a waste of time. 30 days is not enough time to test anything. You need to test over a wide range of different market conditions and that could take months. I run my new auto-strats on live sim (all live trading rules apply and execution is real time) for a while to make sure I don't have any glaring "bugs" then I run live with very small shares so if something goes amiss the damage is minimal. The increase shares the longer it proves itself. But really, 30 days is not enough time.
 
So my focus is on stocks right now. Although my strategy is really adaptable to any market.

Downloaded NinjaTrader and trying to grasp it right now. Does not seem to be very user friendly but I got it setup using Yahoo data since that is free. That is only end of day data but that is fine since I will initially be swing trading until I can build up my equity enough to go full time then I can do day trading.

Paper trading has taught me some stuff though. I realized I need to avoid stocks with low volume. I got into one that I liked but when I was watching the wide spreads I realized it could be a problem. Charts don't tell you that stuff.

I also need to figure how to automate my strategy. I think that would be a must if I got involved in day trading by the minute.
 
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