Paper Trading Journal

K

KGTrader4

Paper trading is no fun, so i dont know how long i will stick with this, but i know i should probably do this for at least a while.

Rules
1. Use multiple set ups depending on market conditions. Breakouts, pullbacks, etc.
2. 10, 30 and 50 day MA;s need to be stacked
3. Do not trade against the general short term market trend
4. Max 10% of total capital in one trade
5. Max 1% of capital at risk
6. Stop gets put in at time of entry
7. Targets flexible, but generally sell half at 10-15% gain. Take profit earlier at my discretion

What am i missing? (But dont add something just to add something and make yourself look smart.

Started with $97,209, today. (thats whats in my paper trading account at TDA)
 
upload_2022-7-28_21-59-10.png
 
You are missing a lot.

There is a mixture of entry rules, exit rules, capital allocation rules and capital risk management. If you take each category, you basically got a couple of rules at most.

The problem is even if your P/L goes up, or down, it will still be indeterminate about the future because there is no well defined system.

Instead of paper, suggest you back test, even manually for say 100 trades. That way you will not waste your time generating 100 new trades. You should be able to take a crack at it this weekend and have some ideas by Monday AM.

Also, just guessing, you are swing trading, so the results will be biased towards trending markets.

Hope that helps.
 
KGTrader4 said:
What am i missing? (But dont add something just to add something and make yourself look smart.
More...

Just to reiterate what @Bad_Badness stated, you absolutely need these rules.

ENTRY rule: What is the set up? Is it well defined that even a 7 year old understands.
EXIT rule: Ditto.
RISK management rule: Do you know exactly how much to risk BEFORE you get in?
MONEY management rule: Realistically, how much shares or contracts can you afford to trade (this ties in with RM above)?

These are just the basics that you need to master. You can go much more in-depth than this, especially when it comes to ENTRY and EXIT. That's where backtesting can come in handy. Bottom line is, if you're a beginner, you need to pay more attention to capital preservation than growth.
 
It's important to learn how to make money
in the markets, but what's vitally important
is that one learn to keep it.

WIN or LOSE, it's detrimental to have a RULE
when to STOP trading. If you keep trading
when you're ahead, you can lose it all, and
if you keep trading when you're losing, you
can lose it all.
 
schizo said:
Just to reiterate what @Bad_Badness stated, you absolutely need these rules.

ENTRY rule: What is the set up? Is it well defined that even a 7 year old understands.
EXIT rule: Ditto.
RISK management rule: Do you know exactly how much to risk BEFORE you get in?
MONEY management rule: Realistically, how much shares or contracts can you afford to trade (this ties in with RM above)?

These are just the basics that you need to master. You can go much more in-depth than this, especially when it comes to ENTRY and EXIT. That's where backtesting can come in handy. Bottom line is, if you're a beginner, you need to pay more attention to capital preservation than growth.
More...

Re your comment on the money management rule, I back into the number of shares I’m buying. But I think it’s covered by my rule that says no more than one percent of capital at risk on any one trade, No? So if I’ve got $100,000 in capital and I don’t want to put more than 10% into any one stock, on dividing $10,000 by the price per share and that’s how many shares im buying.

Re set ups… I know that’s the most important thing besides managing risk it’s something im trying to figure out and struggling
Right now I’m trying to look for stocks that have broken out of a base and then back down to the 50 day MA
Also in a trending market stocks that are broken out of a base but I’m not even so sure about that because everybody uses that which my definition means it will probably suck as a strategy.
i’m not sure how to come up with ideas aside from those two and that’s my struggle
The trade I did today which I posted fit the first idea came back down to the 50 day and rallied from there

probably worth noting, this isn’t a business for me. I’m retired, don’t want to be in front of a screen all day, don’t want to spend eight hours a day doing this, Don’t wanna spend all weekend planning this stuff either. I’m doing it more for fun and keeping engaged, than for money, I don’t need the money.

also, I’m not doing scans. To find ideas. I subscribed to the service, a trailer that I met on FinTwit oh I think it’s pretty good he posts ideas every morning and every night along with probably about 20 charts and comments on the patterns. I get ideas for trades and I learn from it
 
mikeriley said:
It's important to learn how to make money
in the markets, but what's vitally important
is that one learn to keep it.

WIN or LOSE, it's detrimental to have a RULE
when to STOP trading. If you keep trading
when you're ahead, you can lose it all, and
if you keep trading when you're losing, you
can lose it all.
More...
What do you mean it’s detrimental to have a rule when to stop trading?. Seems to me it would be imperative to have a rule when to stop trading if your results are sucking you need to pull back and regain perspective
 
What do you mean it’s detrimental to have a rule when to stop trading?. Seems to me it would be imperative to have a rule when to stop trading if your results are sucking you need to pull back and regain perspective
More...

This is a hard lesson, and very few learn it's
true value without experience of
blowing through a lot of money.

If you're having a bad day trading, unless you
have an infinite amount of money in your trading
account, it's important to set a rule when to stop
trading for that day.

The goal is to "stay in the game" as long
as possible through the learning curve.

Trading is more than just crunching numbers,
it's very MENTAL, and it takes much self analysis
to learn mental state management to trade
at optimum performance.

A RULE when to stop will help the process.
Whether winning or losing, without a set-in-stone
RULE, emotions will influence over-trading.

Example: I never continue trading if I made 3 wins.
And I never continue trading if I've reached 6 losses.

You'll need to determine according to your strategy
what works best for you.

Successful trading is 40% risk control and 60%
self-control. - Hank Pruden
 
Last edited:
mikeriley said:
A RULE when to stop will help the process.
Whether winning or losing, without a set-in-stone
RULE, emotions will influence over-trading.

Example: I never continue trading if I made 3 wins.
And I never continue trading if I've reached 6 losses.

You'll need to determine according to your strategy
what works best for you.

Successful trading is 40% risk control and 60%
self-control. - Hank Pruden
More...

Yeah I think we are saying the same thing, your first post on this may have been a typo
 
You must log in or register to reply here.
Back
Top