How many trades should I make in a demo account before progressing onwards.

[DionysusToast]

Agreed HC - if you were buying CL Futures Options contracts then you'd be risking a few thousand dollars per contract normally.

Still - that's a pretty niche area. Most here are taking directional trades, in which case there is usually an alternative.

 

[HowardCohodas]

Your mentally is all wrong for trading... at least if you want to make money. The difference between a casino and trading is that although there is always an element of luck involved, the odds are in your favour if you know what you are doing trading whilst the odds are against you when you play in the casino.

If you think the market is a casino, then you should also believe your expected returns would be less than zero since the odds are against you. It would be better to go to a casino since you would probably enjoy it more than sitting in front of your computer screen to get your gambling fix.

It is fine to get your gambling fix from trading. I am sure there are a lot of gamblers that are interested in trading for that reason. I just think there are many more that want to learn to make money and learn to trade seriously.

You would do well to review DT's debating tactics before taking him on here by reading some of the threads where he weights in heavily. You have some good points to make, but so far you only brought a knife to a gun fight. Just saying.

 

[DionysusToast]

BTW - Here is the competition. Those serious, focused people working for banks making the money day in, day out. Taking it off Joe Retail trader.

These guys MUST be super focused, super dedicated, go to be early, study religiously to take away Joe Retails money all the time.

A famous London strip club was raided and shut down after a two-month investigation by the city's police "vice squad" found that bankers had been paying almost $1,400 for threesomes in a stretch limo, the Sun reported.

Read more: http://www.businessinsider.com/lond...for-threesomes-in-a-limo-2011-5#ixzz1NcFeyhEQ

Truth be told, I was SIM trading and getting nowhere. The advice I got from a number of people was something along the lines of "stop wasting your time with that crap, it bears no relevance to actual trading".

Still - as a day trader I rely on the following things:
- buying when selling runs out of steam. This is a horrible, counter-intuitive thing to do - buying when a lot of people are selling. It takes real effort to hit the button.
- not hesitating when an opportunity appears. That means reacting right there & then otherwise you end with a poor entry.
- absolutely not chasing a missed trade when it starts to work out.
- living with uncertainty at the point of entry, the more uncertain the better the profit potential (confirmation by it's nature worsens your price).
- passing on trades that don't 'feel' right.

Now - if you are a moving average crossover guy with a totally technical entry and no discretion whatsoever. Then I can see how SIM might help, although you won't actually make any money that way.

If however, you trade similar to me, then SIM is irrelevant. Without money on the line, taking the above decisions and indeed having good 'feel' is totally different from when money is at stake. I do not know why, it just is. As trading is a game of uncertainty you have to learn to trade that uncertainty with something at stake which is what you don't have with SIM. Of course, with daytrading, actual fills are very different on SIM and live. This alone makes SIM for daytrading invalid.

Also - in terms of discipline, people have a tendency to fool themselves. You can reset a SIM account but you can't reset a micro account. You can flaunt your rules in SIM trading without pain. We all break our rules but on SIM you can just write off the experience. With real money at stake, it's something you don't want to repeat.

Micro trading is an investment in your future. If you are not willing to make that small investment, then how seriously are you really taking the learning process?

 

[forker]

DT, you are giving away some clues about your personality as a trader.

To open and close a trade is a function of mouse clicks. I think we cam both agree there is no skill required there. Applying ones edge to ascertain a trade requires recognition of that edge and experience to best execute that edge. I think we can all agree that one doesn't need capital in the decision process of applying an edge.
Managing a trade is a slightly different ball game in that there is a tug of war internally between greed and logic. The difference between live and simulation in this area is a higher level of emotions are at play that otherwise wouldn't be felt in sim, although there are personality types out there that are functionally the same on both.
That beige said, if emotions were removed then only logic would remain. Agreed?
What factor contributes emotions to trading? For some it's competitiveness, for others it's money, and of course not forgetting the poor souls where it's both.

This is a rather simplified view of trading in a nutshell but what stands out to me is that there is no where in the process where physical money contributes anything but emotions.

When you state that simulation is nothing like live I would agree with you in that there is an emotional factor that is attributed to everyone when real money is on the line. However, for the purpose of learning an edge, gaining experience in the market, and teaching ones brain the processes involved; sim trading is different only by a function of emotions.
Now which would you rather choose as a learning trader.

A) emotion free platform whereby you can find your edge?

B) spending money to find your edge with an unwelcome influence of additionally dealing with emotions.

Personally I like to simplify problems and removing emotions from an already difficult process is a logical and smart thing to do. In addition it doesn't cost any money be it £100 or £10000. I think we all know that learning to trade can take several years and small bankrolls can add up in the end. It took me 5 years before I found my way and I can't tell you how much money I lost because I learned on a live account.

I may seem to contradict myself by saying I support sim yet I learned on live. If I could do it again I would have gone sim all the way until I was ready. Today I use sim for testing out new strategies and it's serving the purpose well.

 

[DionysusToast]

"This is a rather simplified view of trading in a nutshell but what stands out to me is that there is no where in the process where physical money contributes anything but emotions. "

There's the rub.Logically, this is true. In reality it doesn't work like that.

I am speaking from personal experience, I wouldn't discuss it otherwise. Dropping SIM saw my trading improve exponentially. This was at the advice of a number of traders I aspire to be like. I took their advice & took the plunge. The difference between SIM & live is huge.

Trading is not a mechanical endeavour. It is more akin to a sport.

Look at it like Golf - a lot of people will play well on pressure free round out with friends. Put the same people in a competition and they will fall apart. This is the same with a lot of competitive endeavours.

Trading IS a competitive endeavour. Many people are competing for the same finite pot of cash.

I can't see how risking perhaps $50-$100 a week is an issue - it's much, much better than SIM trading yet is an insignificant amount. It gives you the feel and just the right amount of pain.

Trading live does not need to cost you a large %age of your capital. You just have to be savvy about it.

 

[forker]

What you need to remember DT is that not everyone is fortunate enough to see a hundred bucks a week thrown away as acceptable. Privileged backgrounds are not enjoyed by everyone.

Edit: the pain you talk about is only necessary at the stage when a strategy has been validated. There is no point in adding that pain unless a strategy is in motion

 

[jiggly]

Trader_Dante said exactly the same thing to his manager at Futex. He's a f*kin traffic warden now.

Everyone has to make a living and you certainly will not be doing that trading on a SIM.

When you come off the SIM, the chances are that you will still blow your account as you make adjustments for the psychological elements. It takes years to get there and that is if you get there.

Lets say you dont get there, you could have just spent 3 years of your life on a SIM and then blow $3000 when you start trading for real.

If your time value for money = $1000 per year for 'tuition' = waste of money and would rather spend your time on the SIM, the odds are on that your real money counterparts are further ahead in the educational curve than you are come the end of the term.

There is a not so obvious difference between those who argue in favour of trading on a SIM and it is to do with their attitude towards money and tolerance to risk. Trading is a risky business, embrace and learn to manage it from day one or wait for your 'opportune time' to 'do it for real'. The choice is yours.

Happy trading!

 

[DionysusToast]

What you need to remember DT is that not everyone is fortunate enough to see a hundred bucks a week thrown away as acceptable. Privileged backgrounds are not enjoyed by everyone.

Edit: the pain you talk about is only necessary at the stage when a strategy has been validated. There is no point in adding that pain unless a strategy is in motion

Then you make it $50 or $20 or $10... If someone is at the point they can't put $10 or $20 into the market, they'll never be trading anyway.

You yourself have said you never SIM traded, yet you are extolling its virtues.

In your case, instead of the losses you took trading, can you not consider that you could have taken a fraction of those losses if you knew how to trade micro-size?

 

[DionysusToast]

Very good post Jiggly.

 

[jiggly]

Very good post Jiggly.

Thank you,

I have experience, dealing with others that say they are serious and then choose to trade on sims for months if not years.

A small portion of them go on to open real accounts as they are up on their demos, then go on to lose all their money.

Some lessons cost money, and everyone that is serious must pay the price at some time. Its a question of how soon they want to really start learning and at what price they can afford to pay for the lessons.

 

[forker]

Everyone has to make a living and you certainly will not be doing that trading on a SIM.

Well that's certainly a marvel. Thanks for stating the obvious. Maybe if you read the thread properly you would see the true nature of the discussion and not make such an obvious yet insensate comment

Lets say you dont get there, you could have just spent 3 years of your life on a SIM and then blow $3000 when you start trading for real.

Anyone blowing 3k after 3 years shouldn't be in this industry period. If the person hasn't learned how to manage money then they never going to succeed.

If your time value for money = $1000 per year for 'tuition' = waste of money and would rather spend your time on the SIM, the odds are on that your real money counterparts are further ahead in the educational curve than you are come the end of the term.

You must have statistical evidence to back up this statement! Otherwise it's nothing more than an assumption. Best leave such statements to those who can bring tangibles supporting their claims to the table

 

[forker]

Then you make it $50 or $20 or $10... If someone is at the point they can't put $10 or $20 into the market, they'll never be trading anyway.

You're missing the point completely and frankly its frustrating coming from someone that claims they are experienced. If someone doesn't have an edge then why should they be stupid and throw money into a live account? Having real money on the line isn't going to get them an edge faster. I find this amusing only it's kind of sad. Do think if you payed your children's school more money that your child would be exposed to better learning material than the other children and as a result learn faster?

In your case, instead of the losses you took trading, can you not consider that you could have taken a fraction of those losses if you knew how to trade micro-size?

I wasn't born yesterday DT and your arrogance in assuming that I should've considered trade size makes me wonder

 

[TimYoung]

The market is a casino. There is a fixed amount of money goes into it and an almost infinite amount of people chasing that same amount of money hoping to profit handsomely. There are a lot of games played in the market to shake people out. The fact that the market is a casino is a benefit once you figure out how weak hands get shaken out and how to bet with the house.

I don't know whether you are missing my point on purpose or whether you really don't get it.

In a casino the games you play the odds are against you.
Trading on the market the odds are in your favour if you know what you are doing.

Can you see the difference?

If you believe that the market is a casino, it doesn't benefit you because in a casino you lose money in the long run. There is no way to figure out how to 'bet' the house. The house always win. If you believe otherwise, then I don't think you totally understand how a casino work and why they always make money.

 

[TimYoung]

You would do well to review DT's debating tactics before taking him on here by reading some of the threads where he weights in heavily. You have some good points to make, but so far you only brought a knife to a gun fight. Just saying.

I don't really care for his other posts if he write the same way he does here. Some of the things he wrote here I am not sure whether he is just trollin' or whether he really does believe in his extravagant claims.

 

[jiggly]

You're missing the point completely and frankly its frustrating coming from someone that claims they are experienced.

The thread is titled : How many trades should I make in a demo account before progressing onwards.

what is the point exactly?

 

[jiggly]

You must have statistical evidence to back up this statement! Otherwise it's nothing more than an assumption. Best leave such statements to those who can bring tangibles supporting their claims to the table

Im innocent until proven guilty your honour!

Do YOU have anything tangible to bring to the table that proves the contrary?

 

[DionysusToast]

I don't know whether you are missing my point on purpose or whether you really don't get it.

In a casino the games you play the odds are against you.
Trading on the market the odds are in your favour if you know what you are doing.

Can you see the difference?

If you believe that the market is a casino, it doesn't benefit you because in a casino you lose money in the long run. There is no way to figure out how to 'bet' the house. The house always win. If you believe otherwise, then I don't think you totally understand how a casino work and why they always make money.

In a Casino, whether the odds are against you or not is a matter of which side of the table you sit.

In the market it is the same. The market is a game, it is a casino, it is by no means fair, it is by no means efficient. The whole thing is a game. How do you think Goldman Sachs trading dept manage to go quarter after quarter without a losing day? Just that they are really good at identifying support & resistance? Or perhaps do you think they might be using their huge size and unlimited risk parameters to screw everyone over?What about HFTs? Aren't they just a tax on the pool of money we all put into the market?

All players in the market want to put an amount of money in and take a larger amount out. This is impossible. Only a minority will take out more than is put in and this is AFTER brokers, secretaries, advertisers, fund managers, marketing, office cleaners etc. etc. etc. have also been paid out of the pool that is the HUGE financial industry that sucks money out of the pot we all put into. This is just like a casino, suckers putting money in, expecting to take more out.

Trading is a game and you can get good at that game and you can win. You have to be a realist about this and understand the gamesmanship that goes on in the markets.

 

[DionysusToast]

You're missing the point completely and frankly its frustrating coming from someone that claims they are experienced. If someone doesn't have an edge then why should they be stupid and throw money into a live account? Having real money on the line isn't going to get them an edge faster. I find this amusing only it's kind of sad. Do think if you payed your children's school more money that your child would be exposed to better learning material than the other children and as a result learn faster?




I wasn't born yesterday DT and your arrogance in assuming that I should've considered trade size makes me wonder

"Having real money on the line isn't going to get them an edge faster."

On the contrary, having real money on the line is exactly what is going to make them progress faster and not repeat bad habits.

 

[forker]

I'm getting bored with your lack of consistency DT. Fist you spoke of getting a thick skin, later you used engaging the market, now you're implying it's how bad habits are broken. Smoking is a bad habit, as is drinking too much coffee. Bad habits are broken by awareness and self-discipline.
You are characterising live accounts as the only means to self-discipline. That's a poor assessment of humans and doesn't apply to everyone. Are you the type of person that can only enforce self-discipline by inflicting financial loss as a form of punishment? If that's the case then you have just revealed your opinion as being accommodative only towards individuals with the same problem. This is a very narrow sighted standpoint don't you think?

 

[DionysusToast]

You are a funny Forker. The internet is optional. If you get bored, you can switch if off.

There are a host of advantages to trading micro size instead of SIM. Forgive me for not listing them all in post 1.

Let's get this right:

SIM trading is better in your opinion that trading for a total risk of $1 per trade?

There is absolutely no amount of money a new trader should trade instead of SIM trading? Is 10c per week too much to risk?

It appears also that you think someone should start SIM trading before they have any clue at all about where/when to exit?

In my opinion - the process should be like this:

1 - Figure out how you want to approach the market. (months at least)
2 - Get yourself confident with a platform by SIMing. (1-2 days)
3 - Trade your system with small size for an appropriate period (20 days for day trading minumum)
4 - Review at the end of 20 days
5 - Adjust (if necessary) and repeat.

Either way you do this - the moment you go from SIM->Live you WILL lose money.
With your approach - you will build up a load of false confidence in terms of fills and how you personally react to being in a trade. You are more likely to go in size when you leave SIM. Your chance of a blow up is much higher because you have confidence but no proven ability.

With my approach - you won't blow up. You may lose a couple of $200 in a few weeks/months and lick your wounds and have a re-think. Overall - that experience will be much better than a year of SIM trading.

Sorry if this was a bit boring for you.

The fact that you did it my way, claim to be profitable but are claiming another way is better is somewhat ironic in my opinion.