Trying to get into day trading properly, seeking advice, live in london....

[i am nobody]

But suppose that when you start trading real money, you find that after your first losing trade, you get into a winner, but don't hold it for 4 points, you just get out at a profit of 2 points because at least you've back to break even. Well what you've done now is completely changed that statistical nature of your trade methods that should make you be profitable.

Biggest error you can make: you did not follow your system!
One of the most important reasons for going sim first is to learn to ALWAYS follow your rules. So it is clear that you should go back to sim again to build confidence to follow the rules.

You also make a big error in your logic: trading is about results on long term. You can NEVER judge or take decisions or conclusions based on 1 or 2 trades. You said yourself "statistical nature". You should know that statistical relevance depends on a statistical number of events, so clearly not on 1 or 2 trades like you posted.

If you would go immediately life, what would you do if you lose three times is a row and lose 50% of your account? Stop forever? Going sim first gives you the opportunity to learn and to make mistakes without financial consequences or rather disasters. If you master all this you can go life and will be much better prepared for real trading.

 

[Gotcha]

Biggest error you can make: you did not follow your system!

You also make a big error in your logic: trading is about results on long term.

Of course I agree with all this, but I still think there is something different about learning a lesson when trading live versus when trading SIM.

Most, if not all, of the traders here who appear to be doing well now do say they had years of losing, so I don't think anyone has ever gone down the proper route of first just trading SIM and then transitioning slowly to trading live. Because of this, maybe we can't really even say that this is the best way to go about it. Sure all the traders who used to lose for years think they could have been better about doing it the right way, but I just have this hunch that most need to hit rock bottom first before building the drive and determination and learning that all important discipline that is necessary.

The reason I say this is because of that phenomenon of beginner's luck. Even if you SIM trade for a year and do well, and then you trade live for months and do well, a time will come when things start to fall apart, maybe when your edge stops working and you need to start to look for something new. But because this trader has maybe never been at rock bottom with the hoping and praying routine, he might not have truly learned this pain that makes you humble. So just at the time as he's putting on size, things may be changing in the market.

Granted, if his system is really good that tells him to start trading after 3 losses or something similar he might be saved from something catastrophic, but deep down, I still think the best lessons come from the pain of losing actual money. Its like a boxer. He might train every day with a trainer... hit the weights... do lots of cardio... spar with his training partner, but until he gets into the ring with a guy who wants to badly beat the crap out of him, he will still be missing an important component.

 

[Xela]

I don't think anyone has ever gone down the proper route of first just trading SIM and then transitioning slowly to trading live.

I agree that one gets that general impression, from reading the forum.

I'm the "statistical outlier" who changes the "average" significantly: for various reasons I traded on sim for four years before ever opening a real-money account.

Because of this, maybe we can't really even say that this is the best way to go about it.

I don't think there's a single, objective "best way to go about it"; different approaches suit different people.

I just have this hunch that most need to hit rock bottom first before building the drive and determination and learning that all important discipline that is necessary.

And you may be right - for "most people". I'm not in that group, myself, because my personality is different from the "norm" (I have some degree of Asperger's Syndrome, and was never short of determination, never emotionally attached to results, and so on.)

So "it takes all sorts" and it's hard to generalise.

 

[K-Pia]

Of course I agree with all this, but I still think there is something different about learning a lesson when trading live versus when trading SIM.

Most, if not all, of the traders here who appear to be doing well now do say they had years of losing, so I don't think anyone has ever gone down the proper route of first just trading SIM and then transitioning slowly to trading live. Because of this, maybe we can't really even say that this is the best way to go about it. Sure all the traders who used to lose for years think they could have been better about doing it the right way, but I just have this hunch that most need to hit rock bottom first before building the drive and determination and learning that all important discipline that is necessary.

The reason I say this is because of that phenomenon of beginner's luck. Even if you SIM trade for a year and do well, and then you trade live for months and do well, a time will come when things start to fall apart, maybe when your edge stops working and you need to start to look for something new. But because this trader has maybe never been at rock bottom with the hoping and praying routine, he might not have truly learned this pain that makes you humble. So just at the time as he's putting on size, things may be changing in the market.

Granted, if his system is really good that tells him to start trading after 3 losses or something similar he might be saved from something catastrophic, but deep down, I still think the best lessons come from the pain of losing actual money. Its like a boxer. He might train every day with a trainer... hit the weights... do lots of cardio... spar with his training partner, but until he gets into the ring with a guy who wants to badly beat the crap out of him, he will still be missing an important component.

Both of you are right.
We need to learn from other,
As well as by our own experiences.

We want to learn from other to avoid reinventing the wheel.
But we will never be skilled before we put theory into practice.
Knowledge without practice is as BS as practice without knowledge.
One can learn everything by himself. But it'll take longer without books.
Apprenticeships is Theory + Practice. Theory is record keeping,
Of others as well of our own experience. Without books,
One will have to creat what has already been written.
Anyway, One has to make his own experience.
There is no shortcuts only steady assimilation.

 

[Gotcha]

I'm the "statistical outlier" who changes the "average" significantly: for various reasons I traded on sim for four years before ever opening a real-money account.

Quite the interesting data point you are!

I don't think there's a single, objective "best way to go about it"; different approaches suit different people.

Absolutely. But this is also why I almost encourage people to trade live after they "think" they have a clue. Its only when trading live that you see what your problems really are. There is no point in continuing to SIM trade a certain way that you might not actually be able to do when trading live. (ie. you think you can hold for a 5 point stop in the ES, but when trading live and you realize you're about to lose another $250, you might second guess 5 point stops) But if you can trade live just as well as you trade SIM, even better.

So "it takes all sorts" and it's hard to generalise.

And so since its hard to generalize, trading SIM for too long might not be beneficial for all.

 

[Ben Green]

I don't know this for a fact, but I bet most of the top traders in the world don't even know what a sim is...(doubt Soros ever practiced in a sim). Not saying they can't be useful, just so many times I see people bragging about how much imaginary money they made, but loose with real money on the line. It can be a great learning tool, but don't wait too long before taking the training wheels off.

 

[K-Pia]

Its only when trading live that you see what your problems really are. There is no point in continuing to SIM trade a certain way that you might not actually be able to do when trading live. (ie. you think you can hold for a 5 point stop in the ES, but when trading live and you realize you're about to lose another $250, you might

And so since its hard to generalize, trading SIM for too long might not be beneficial for all.

It's especially not beneficial for profitable traders.
But for the majority of retail traders, SIM is better than real.
Why ? Simply because they lose real money while it's better to lose virtually.
I agree that Real trading uncover problems not revealed while Demoing.
But these problems are mainly Psychological ones. However,
Most traders are losing due to technical factors, first.
Put them in SIM and they're still losing.
I agree with @Xela that :

IF NOT SUCCESSFUL SIM TRADING,
Then NOT SUCCESSFUL TRADING REAL.

There is no point going real if not successful Demoing.
That's the first problem to be solved. The second is the psychological one.
Once you've got a good strategy then you can trade real and apply discipline.

 

[AbbotAle]

I know more than a few pretty profitable traders that use SIM a lot.

It's excellent for practice, reminds you what your edge is, how to spot it, how to trade it etc.

One uses Sim every morning at 4 times the speed (trades DAX) to get him in sync with trading before he goes on to real trading. He replays a morning session (picks a random day over the last 2 years) for about 1 hour (sim time). He swears by it.