Those are all psychological issues to transcend, which are far more important, than any viable trading system one may choose to uses.
Sim VS. Real Money trading
- Thread starter Jdesey
- Start date
Without a doubt this psychological issue will confront mr doug very early in his career. This is where SIM and live trading differ. Mr Doug must make haste to settle quickly in his own mind that he IS NOT his trades. It is too easy to identify oneself with their trades..successful ones and failures...thus creating rollercoaster of euphoria on one end and berating oneself on the other end. We are just humans attempting to do something we think may be helpful and worthwhile. In this endeavour we will see successes and failures. One has nothing to do with the other. Each is its own package. What we do in life or fail to do doesn't become us unless we allow it to. We have to learn to rise above all those things.
Yep, I fight the same thing from time to time.
Many if not most of us have gone through that stage. In fact, it's what washes most out of the profession but the ability to take the loss as pre-determined and patiently wait for the next signal is what separates the traders from the dreamers. Reminiscent of the Greek tale of Sisyphus who was condemned to perpetually push a boulder up the mountain to have it slip from his grasp just as reaching the summit.
there is no difference
and when there is a difference its not beaocue of real money or some other shit, its becaous when trading sim what u just describe here happens:
it does not need to take minutes sometime just second in delay in action and decision making.. that's how trader tricks himself into believing that he could...
when he tricks himself into believing and therefore switch to real money, those tricks are impossible to replicate - market does not allow for the delay in action.... hence the truth is exposed...
then trader uses new tricks instead of admitting that he lied to himself on sim, he tries to explain the fiasco by the pressure of the market, pressure of the real money, brokers dishonesty etc etc..instead of admitting that he can not trade, and never could
The good news! There is no difference in Sim or real money live trading! Whew! good to know! The bad news. Most can't trade and never could and by extension probally never will!
Good to know these little tidbits.
Put your dinero in a CD.....and be done with it. Make it easy and save money.
probably, but not necessarily
the "would be" approach on sim is a necessary part of development of the method (and the trader) that's why it so common
while "would be " trading (and let's agree that sim in a nutshell is the would be trading) the wannabe trader fantasizing, dreaming, assuming... and imho nothing wrong with that - that how ideas are born , how repeated pattern are noticed, how they are discerned and evaluated
but and after a while, with the development of the method and the trader, the "would be" decisions should shift in time from hours, to minutes, to seconds... unit they are done right the way, instantaneously... that's when the dreams come true
and that's when the wanabe trader is ready for the showtime on real moneyunfortunately, many people pull the trigger too early, that's imho why this problem (discrepancy between the sim and the real money trading) is so widespread
Developing and practicing a method of trading is where Sim can be useful. However, the "process" of learning and practicing a strategy is one part of the picture.
Execution is the another part. Execution is where the performance is at.
The latter can be done on a Sim but IMO a sim doesn't carry the same capacity to effect erroneous psychological responses as trading live with real money does. While the execution is the same the final results can differ even though both are "live."
So this third part has to do with a traders psychology. That is why two traders using the exact strategy will have different results. Even two computers trading the same event can have different results. ....speed of computer..latency issues...broker....etc.
Execution is the another part. Execution is where the performance is at.
The latter can be done on a Sim but IMO a sim doesn't carry the same capacity to effect erroneous psychological responses as trading live with real money does. While the execution is the same the final results can differ even though both are "live."
So this third part has to do with a traders psychology. That is why two traders using the exact strategy will have different results. Even two computers trading the same event can have different results. ....speed of computer..latency issues...broker....etc.
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well execution is an art
but by execution one should understand not the actual process of imputing the order, but the thinking, recognizing when the signal to act is due based on recognizing the confluence of system's patterns and acting appropriately on them (algo trading trying to avoid it making computer to recognize the patterns and act on them accordingly)
analogy with chess: the general theory is available to everybody but everyone will use it with different results
and results has very little to do with psychology, they mostly has to do with training and talent
unfortunately, unlike the chess there is no recognized theory in trading.. so the psychological aspect in trading is mostly connected to the fact that trader does not know for sure if his method is a viable method
elder try to convince himself and other that the trader has viable method...
i think this convinction should not be forced on trader by himself (or especially by others), it should come to him slowly over the long periods of testing, retesting, changes of method, painful discoveries of ones own limitations and those of the method's etc etc...
one should arrive there