Its so True...

[SimpleMeLike]

Hello,

I will paper trade til my hands fall off before I risk real money with no statically proven evidence based trading system i can trade.

I back test and paper trade everything. Why lose real money if you don't have a proven trading system?

Forget all this discipline stuff, find a trading system that has proven to make money in the past, and trade per the system rules. It's simple. The hard part is finding something that works per your goal.

Stick to paper trading til you ready. It's a no brainer. Forget all this paying dues stuff. Paper trade til you are ready to risk real capital and have the confidence of Tom Brady in the superbowl. It's free education til you find something that work. Why risk your hard earn money trading if you not confident what you do have high odds of making money? That money can be used for other stuff, like house remodel, savings, retirement, vacations, kids, spouse, new car, etc.

 

[Mtrader]

When I started, trading there was no such thing as back testing and sim trading programs so I learned the hard way and I paid my dues to Mr. Market

I started about 25 years ago. We did already have backtesting.

you can sim trade and back test until the cows come home

That's not what I wrote. You have to paper trade till you are ready to go live.

you will never be able to learn all the techniques and tricks the market maker preform with the order flow

All these "tricks" are included in the backtesting data. After +25 years I still don't see the problem with these "tricks".

I lost a lot of money because I did not backtest enough.

My real performance would be exactly like my papertrading if I would have taken all the signals generated in my papertrading. The missed performance is a result of not following the rules. My papertrading gave a very acurate picture of what could be expected in real trading.

 

[java]

Human traders are a dying breed. You think a computer is just going to put it on to prove to humans it's not a snowflake?

 

[Mtrader]

Human traders are a dying breed. You think a computer is just going to put it on to prove to humans it's not a snowflake?

My personal opinion:

As long as human’s have knowledge that computers don’t have they can beat the machines. Computers need input. If you don’t put the correct information in a computer he will remain completely stupid.

If a computer is so smart, why can he not built an algorithm to always buy the bottoms and always sell the tops? Computers are just useful tools for humans who know how to handle them.

I always wonder how Renaissance is using computers. They have the budget to attract the best people and can buy the best computers to trade. I would like to see their trades. How long do they stay in? Entry? Exit? Leverage?
If we would know this we would have an idea of what computers can achieve.
The answer could be a surprise. A good one, but also a disappointing one.

 

[java]

My personal opinion:

As long as human’s have knowledge that computers don’t have they can beat the machines. Computers need input. If you don’t put the correct information in a computer he will remain completely stupid.

If a computer is so smart, why can he not built an algorithm to always buy the bottoms and always sell the tops? Computers are just useful tools for humans who know how to handle them.

I always wonder how Renaissance is using computers. They have the budget to attract the best people and can buy the best computers to trade. I would like to see their trades. How long do they stay in? Entry? Exit? Leverage?
If we would know this we would have an idea of what computers can achieve.
The answer could be a surprise. A good one, but also a disappointing one.

Challenge, my computer vs your brain trading any agreed upon strategy you choose. Your rules.

edit:Rules, an interesting word. same word different meanings. To one a rule is the Almighty Law. To another, it is a guideline. And the more immoral they are the wider the guideline gets. I must confess, not only am I very immoral, I'm a downright cheat. Oh I play by the rules religiously, until, IDK, I guess I just have an instinct when to get out.
Is that what you mean humans beating machines?

 

[wrbtrader]

Paper trading is a very good way to tell if a strategy won't work. That's extremely valuable information, and I'm not sure why you'd give up the opportunity to determine that for free unless you're simply impatient. Where most get into trouble is assuming that it also tells you what does work. It simply tells you what might work, at which point the trade small advice is certainly sound.

I somewhat agree with Sig on this. The problem is that paper trading is usually used the wrong way which is why many look down upon it because they didn't realize they used it incorrectly or thought about it the wrong way.

Just don't fall into the trap of trying to determine which one to do while not doing the others when comparing backtesting, simulator, real money. They are all important and its a necessary process from one to the other.

Backtesting: Determines what's wrong and good about a method. If you don't have a rule base trade method even if you're a manual trader...you are not going to know what to fix or adapt whenever market conditions change.

This also helps you develop the trading plan that's needed to use any trade method. Thus, if the trading plan sucks and the trade method is good...there will be a conflict that will negatively impact one's trading performance.

Papertrading (simulator): Helps you to use your method (manual or automation) with the trade execution platform so that you can make final adjustments prior to any real money trading. You can also use papertrading to become familiar with your trade execution platform but as soon as you become familiar or make your final adjustments...its time to trade with real money preferably via small size.

I personally would advice to separate backtesting from papertrading. Thus, as soon as you backtest for whatever reasons...stop papertrading. Those that ignore backtesting and papertrading will have more problems in their trading than those that don't ignore them.

Real Money: Its only real money trading that will allow you to grasp the psychological aspects of trading because anyone that's not automated as most are not...real money trading will expose your strengths and weaknesses about you as a trader whereas backtesting/simulator trading will expose your strengths and weaknesses about the method but not about you as a trader.

For example, this forum is litter with trade journals where traders discover their ability to perform was connected to what some refer to as the "mental edge"...these trade journal OPs discover that the psychological aspects of trading is indeed important and does impact their performance. Don't misunderstand, I didn't say psychology is the most important aspect...I'm saying don't underestimate its importance. I personally think its just as important as backtesting and simulator trading.

I prefer to view the psychological aspects of trading via the subject of behavioral finance...look it up on Google if you don't know what it is.

 

[Van_der_Voort_4]

I always wonder how Renaissance is using computers. They have the budget to attract the best people and can buy the best computers to trade. I would like to see their trades. How long do they stay in? Entry? Exit? Leverage?
If we would know this we would have an idea of what computers can achieve.
The answer could be a surprise. A good one, but also a disappointing one.

I hope this guy who has politics based differences with his boss at Rentec goes back to his old job and not somewhere else.If at all.
I wrote about this on a thread discussing his disagreement which became public news.
And word never gets out in the open about any of it what they are doing.

 

[Mtrader]

Challenge, my computer vs your brain trading any agreed upon strategy you choose. Your rules.

Correction, I use my brain AND a computer. Not interested in challenges, as I don't need them and would have to show information I don't want to share.

Is that what you mean humans beating machines?

When I say beat the machines, I mean that I think that I generate better trades than computers do, at least in what i am trading. How much does a computer generate daytrading futures ES?
If they would beat me I would have no problem with admitting they are better. But I was always curious about the outcome. So motivation is curiosity, not to show that I am better.

 

[lovethetrade]

I always wonder how Renaissance is using computers. They have the budget to attract the best people and can buy the best computers to trade. I would like to see their trades. How long do they stay in? Entry? Exit? Leverage?

To answer this one would have to reveal a lot of what they know. Maybe another time...

 

[java]

Correction, I use my brain AND a computer. Not interested in challenges, as I don't need them and would have to show information I don't want to share.


When I say beat the machines, I mean that I think that I generate better trades than computers do, at least in what i am trading. How much does a computer generate daytrading futures ES?
If they would beat me I would have no problem with admitting they are better. But I was always curious about the outcome. So motivation is curiosity, not to show that I am better.

My strategy is very simple, but it would take weeks to explain it to somebody because there are just little things that are too subjective but not really, they have rules also if you think about it but it becomes kind of silly to try to program them all in because they are either rare or totally free to execute anytime I "feel"like it. But If I ever could program all that into my computer it would beat me just because it would be more keenly aware of minute details.