Paper Trading Strategy?

[OddTrader]

Quote from GIG:

OddTrader,

Hehe, the $3000 dollar prize is a little out of reach. If you take a look at the top 10 week by week, you'll notice some of these guys are getting 20-40% returns per week... If I could beat that consistantly, [enter witty remark here].


It seems as though the overall consensus is to trade, but with smaller lots, as opposed to paper trading.

Thanks for the feedback all,

Regards,

Brandon

Brandon, trading is a very very risky business. Therefore, trading basically equals to managing risks for some expected returns, rather than making big money or high returns (like your mentioned percentage by those guys).

When you start trading, you must trade only the absolute minimum amount (such as 1 share if possible) which should not exceed 1 or 2% of your risk capital that ideally should be not more than 5% of your total capital.

Then you can learn from your (most likely loss) experiences. You need to investigate your losses and gains, and you have to stop trading for a while, maybe for ever, after lossing a 5% capital.

The aim is you have to devise an approach so that you are able to servie for several years based on your available capital.

I can only share with you my own experiences. I don't know whether the above suggestion would be suitable to you. You therefore should ask more people/friends/relatives and other ET members for different suggestions/opions.

Good luck again.

 

[OddTrader]

Quote from inandlong:


You can also practice using your trading platform. Plenty of guys still make mistakes pressing the wrong keys or clicking the wrong thing.

That's truly true. :eek:

 

[trend456]

Quote from inandlong:


Disagree.

A caveat to paper trading, as the esteemed nitro once said, is focus. You simply do not focus the same paper trading as you do real time. Along with that is the emotional aspect that accompanies real time trading that every trader must learn to endure, even those that say they have no market opinion.

Having said that, paper trading is a must. It allows you to learn about the nuances of your method. Paper trading real time will give you a feel for taking trades without having the benefit of the rest of the chart in front of you to say oh yeah I would have done that. Or this time I would have exited there because blah blah. You can also practice using your trading platform. Plenty of guys still make mistakes pressing the wrong keys or clicking the wrong thing.

You want to try to work out all the bugs you can prior to risking the first dollar. Only when you are completely comfortable with your method and your platform should you put up money.

Paper trading is not a MUST. It is recommended. You should know the platform for sure which I agree. I understand the benefit of paper trading but it is far away from real $$$$.

Like others have mentioned, if u trade with real $$$$ start from the smallest possible shares or contracts. If u have a small capital, paper trading might be the best way. Or trade with real $$$$ to get the feel and paper trade to confirm your methods and get back to real $$$.

You don't want to end up becoming good in masterbation and bad on the real deal. Masterbation doesn't make you a good. The real experience makes u good.

Good luck!

trend

 

[vanilla2]

Whether you go paper or real, I would highly recommend that you do NOT trade delayed data. Unless you're trading 60 minute bars or greater, I think a 15 minute delay will ravage most systems. Just a ball park, I would guess this could knock at least 20-30% off a decent swing system if not much more.

On the other hand, I concur with the others, small lots of real money are better than paper trades. You'll get the tactical experience necessary for the real thing. Not sure about this lycos setup that only does market orders. If I were you, I would go with an inexpensive piece of real time charting software. From the sound of it, maybe end of day trading off daily bars is a good way to go. If you traded the etf's, lycos livecharts will actually give you very basic realtime index charts for free if I remember correctly.

enjoy

 

[trend456]

Quote from vanilla2:

Whether you go paper or real, I would highly recommend that you do NOT trade delayed data. Unless you're trading 60 minute bars or greater, I think a 15 minute delay will ravage most systems. Just a ball park, I would guess this could knock at least 20-30% off a decent system if not much more.

On the other hand, I concur with the others, small lots of real money are better than paper trades. You'll get the tactical experience necessary for the real thing. Not sure about this lycos setup that only does market orders. If I were you, I would go with an inexpensive piece of real time charting software. From the sound of it, maybe end of day trading off daily bars is a good way to go. If you traded the etf's, lycos livecharts will actually give you very basic realtime index charts for free if I remember correctly.

enjoy

:eek:

Ahhh........

I want to see a day trader trading delayed data on ES.

LOL

bwahahahahhahahaha

good trade!!

trend

 

[Covertibility]

Don't waste time paper trading. You'll find out if trading is right for you once you hit the real thing. Provided that you survive long enough you'll learn things here and there that no one talks about or keeps secret in order to stay in the game. Trading is almost analogous to war. Once the first shots go off and you start suffering casualties, do you run or stay and fight? If you run, your done, go do something else. If you stay and fight, you wind up learning more about yourself that many never many never come to realize.

As for models and tricks, they'll work as long as everyone isn't doing the same thing. Taxes and commissions eat away gains. Inevitably, you'll figure out investing for the long haul will outperform short term trading. Although times do arise where short term trading becomes a no brainer, but those secrets you'll learn along the way. Good luck.