Paper Trading Strategy?

G

GIG

Hi All,

I plan to finish off a new trading system in a couple of weeks. I plan to paper trade for a couple of months to see how the system works out.

I was thinking of setting up the system to interface with an online 'virtual stock exchange'. i.e. I can write some code which can automatically log into the website and then buy or sell when the system needs to do so.

Lycos has a free service where you can do this:
http://maxinvest.finance.lycos.com/index.php

Quotes are 15 mins. delayed, you only have the option to buy/sell (doesn't look like you can short or place stop/limit orders).

I'm planning to swing/position trade, so I don't think the 15 min. delay would play as much of an impact as opposed to day trading...but I don't know if the delay would cause problems.

I remember virtualstockexchange.com had a free service, I've recently checked and now it costs a little $ to sign up.

Has anyone else done this before, any caveats with this method?
Is it a close enough model to verify the system's proficiency?
Anyone have favourite methods to paper trade?

Regards,

Brandon
 
Quote from GIG:

Hi All,

I plan to finish off a new trading system in a couple of weeks. I plan to paper trade for a couple of months to see how the system works out.

I was thinking of setting up the system to interface with an online 'virtual stock exchange'. i.e. I can write some code which can automatically log into the website and then buy or sell when the system needs to do so.

Lycos has a free service where you can do this:
http://maxinvest.finance.lycos.com/index.php

Quotes are 15 mins. delayed, you only have the option to buy/sell (doesn't look like you can short or place stop/limit orders).

I'm planning to swing/position trade, so I don't think the 15 min. delay would play as much of an impact as opposed to day trading...but I don't know if the delay would cause problems.

I remember virtualstockexchange.com had a free service, I've recently checked and now it costs a little $ to sign up.

Has anyone else done this before, any caveats with this method?
Is it a close enough model to verify the system's proficiency?
Anyone have favourite methods to paper trade?

Regards,

Brandon
More...

I would go straight to trading for real. Whether you lose or win it's a great experience.

Good Luck.

trend
 
Quote from trend456:



I would go straight to trading for real. Whether you lose or win it's a great experience.
More...
Agreed. Partly.

Absolutely minimize your exposure as long as you're still new.
With penny-per-share pricing like you get with Interactive Brokers, there's no reason not to start with absolute minimum.

Trade 10 shares at a time. Then 20, 50, 100 and so on - Once you're getting better of course. You'd learn more than the VSX.

Don't even think about trading 100/500/1,000 stocks at a time or futures / e-minis. That's not what you're doing. Learn first, then do. Trust me - It's your money. It's up to you.


All the Best and Good Luck...
~Scientist
 
Quote from GIG:

Hi All,

?
Is it a close enough model to verify the system's proficiency?
Anyone have favourite methods to paper trade?

Regards,

Brandon
More...

No, it is not! If you papertrade, you have to have exactly the same setup like you will be trading for real with . Otherwise you are wasting your time.
Walter
 
Quote from Walther:



Otherwise you are wasting your time.
Walter [/QUOTE

Agreed, papertrading is a very good way to waste one's time, and later money as well. :p
More...
 
agree, that paper trading has limited value,

the exception is that if you can simulate on your actual trading platform, there is value in getting used to the way the software feels

also, someone once said on this board 'trade the simulator like its the real thing, and trade the real thing like it's the simulator'

i think there is value in this, just look at what athletes and musicians do, they practice and train a much greater amount of time than they perform for live audiences
 
Quote from trend456:

I would go straight to trading for real. Whether you lose or win it's a great experience.
More...
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.
 
Quote from GIG:


I was thinking of setting up the system to interface with an online 'virtual stock exchange'. i.e. I can write some code which can automatically log into the website and then buy or sell when the system needs to do so.

Lycos has a free service where you can do this:
http://maxinvest.finance.lycos.com/index.php
More...

So, you are going to use the $200,000 PLAY money for papertrading. After winning the prize of REAL money $3,000, you will go ahead using your automated system for real trading with REAL money.

If the above is your plan, I really wish you good luck.

:confused: :(
 
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
 
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