Paper trading

Paper trade until your account is doubled, risking 1-2% per trade.

Then fund a small money account. Double again risking 1-2% per trade.

Then fund full account and do same.

Ideally, skip to #2 first (fund a small money account), and get accustomed to trading/emotions with real money.

Paper trading is not even close.
 
Robian said:
Sorry if the question is a bit stupid, but I've already googled it and decided that paper trading is practically the same thing to demo trading?
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Yeah most traders literally use both paper trading and demo trading in the same context
 
Mirah said:
Hi,

Before you start trading real money. How many months did u paper trade?
Which platform did you use?
Did you follow any technical indicators?

Thanks.
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Went on one full year and some months on the MT4 and a web platform ,one thing that I am amused about is newbies making charts complex for easy grasp.Instead of going with indicators that can be easily understood for their beginner class you find quite the opposite .My all time fav was the Stoch ,RSI and MACD .
 
I traded on paper for six months prior to live trading. I used the most traditional trading platform MT4 for it. No i didn't use any technical indicator, I used to trade based on news and fundamental analysis. I made almost $500 with the equity of $2000 and leverage 200x
 
Trade on a simulator first. if you can’t make money on a sim do not trade the real market. Also realize that most paper money/simulator environments are essentially sales tools that pad your trades to make it look like you are making money when you’re not (Think or Swim is a great example of this.) To get around this problem build a P&L whereby you always open yourself at the published Ask and close yourself at the published Bid then account for all costs (commissions/taxes). Did you make money? Probably not, but on the sim you probably did. The psychological/physiological differences between paper money and real money are extreme. Think of trading paper money as watching the movie Saving Private Ryan and trading real money as actually being Private Ryan.
 
PennySnatch said:
To get around this problem build a P&L whereby you always open yourself at the published Ask and close yourself at the published Bid
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And set a timer for 60 seconds, then use the bid or ask at that moment. That way you won't make false πs from "buying" or "selling" spikes / misprints / datafeed errors.
 
Mirah said:
Hi,

Before you start trading real money. How many months did u paper trade?
Which platform did you use?
Did you follow any technical indicators?

Thanks.
More...

Mirah,

I been trading paper for about 1.5 years on and off when I have time from my full time job. For the past 6 months, i trade everyday paper diligently. And I will continue until I prove I have high probability system to make consistence money.

I do not follow technical indicators, just price action and risk vs reward.
 
Mirah said:
Hi,

Before you start trading real money. How many months did u paper trade?
Which platform did you use?
Did you follow any technical indicators?

Thanks.
More...

I traded paper one year using FX- not paper, but online simulators. I traded paper 6 months for stocks over 20 years ago. I still test new strategies on simulator occasionally. I used OANDA and Investopedia practice trading simulators. I used indicators but they work mostly for real time minute to minute movements- they can be good for getting in and out, but they are not always reliable and don't really give you the goods on longer term direction. I use a fine tuned strategy now. No strategy is bullet- proof so you have to manage risk with your capital so you live to trade another day. Indicators I used were RSI, ATR, MACD, W%R and a few others. I recommend using small amounts of money to trade Live as soon as possible so beginners get used to trading with real money. The psychology is slightly different when trading on paper/simulator versus trading with money- you need to learn to balance your nerves while learning to trade successfully. It helps to like Adrenalin.
 
If you're trading a real account, that's well funded and you're not relying on daily / monthly gains that you MUST HAVE to pay bills, than if you traded well on paper it can surely transfer to live trading.

If your situation is your constantly stressed, underfunded and must make money or bills don't get paid that month, than yes in a lot of cases and for most people no amount of paper trading will over come that.

That may seem obvious, but I think its important to recognize that, instead of just drawing a hard line of saying paper trading doesn't translate over to real trading because I don't think that's completely accurate, but I have no hard data besides personal experience.
 
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