FAQ Do I Have to Accept some Big Losses in the Beginning?

NVP

Well-known member
Jun 21, 2004
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get your act togther on the paper.............once you are litrally consistently creaming the market on paper then start low on real money ............it will still hurt guys .......

it always does when one is "in the field" (as 007 always says)

and never be ashamed to retreat back to paper if things are unhinging .....nothing wrong with that

N
 

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Gring0

Well-known member
Aug 31, 2015
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You can be successful with paper trading and then fail always with real money which is very common, why? Because trading is about YOU, your emotions and all the rest, when there is real money involved your decision making will be completely different.

With paper trading your emotions will not arise and by the end of any results being positive or negative you have not learn much, probably nothing.

Best is to open a tiny account and get involved, do not postpone your learning curve because there is nothing to learn with paper trading but just a waste of time.

Open an account with only $100, is that is too much open it with $10.......
I'd say there are two aspects to trading:

1. Solid plan with an edge.
2. Ability to follow that solid plan.

Paper trading identifies whether the plan has a positive expectancy, without feeling emotional pressure. Once it's established that the plan is sound, one can open a small account and increase the size with continued progress.

Starting small without confirmation of a solid trading plan may work but is likely to make it difficult to identify whether the problems are due to emotions, unsound plan, or both. I can tell from my own experience that getting rid of emotional baggage is far tougher than taking another few weeks to paper trade. With replays available it doesn't take long with accelerated speeds to get this part done at a rapid pace.

Gringo
 
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dbphoenix

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Aug 24, 2003
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You can be successful with paper trading and then fail always with real money which is very common, why? Because trading is about YOU, your emotions and all the rest, when there is real money involved your decision making will be completely different.
If one's decision-making is completely different, he didn't paper trade properly. To begin with, he most likely didn't have a trading plan.

"Trading to learn" is no more rational nor profitable than playing roulette to learn.
 

Fugazsy

Well-known member
Nov 10, 2014
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I'd say there are two aspects to trading:

1. Solid plan with an edge.
2. Ability to follow that solid plan.

Paper trading identifies whether the plan has a positive expectancy, without feeling emotional pressure. Once it's established that the plan is sound, one can open a small account and increase the size with continued progress.

Starting small without confirmation of a solid trading plan may work but is likely to make it difficult to identify whether the problems are due to emotions, unsound plan, or both. I can tell from my own experience that getting rid of emotional baggage is far tougher than taking another few weeks to paper trade. With replays available it doesn't take long with accelerated speeds to get this part done at a rapid pace.

Gringo
BS.

You can follow your plan with paper trading and not with real money.
 
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Fugazsy

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Nov 10, 2014
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If one's decision-making is completely different, he didn't paper trade properly. To begin with, he most likely didn't have a trading plan.

"Trading to learn" is no more rational nor profitable than playing roulette to learn.
Dp

You last post prove to me you do not trade, you only good with words, trading is about doing not knowing. I know another trader like you, he always have an answer and can explain all the bit and pieces but has not any idea how to be profitable.

I suggest you listen a bit.

Now I leave you with the last word.
 

dbphoenix

Well-known member
Aug 24, 2003
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Now I leave you with the last word.
The usual refuge of those who can't support their view.

In forty years of trading, nineteen of it online, I've never known anyone who learned trading by "doing" -- and by "trading" I mean substantial money, not hobbyists -- without blowing their accounts two or three times, and even then not doing much better than break even.

But if that's the route beginners want to take, nothing can stop them. Until they go broke.
 

Signalcalc

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May 21, 2016
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I think most have agreed that paper trading is good for a number of reasons before going live. Another couple of reasons for paper trading I have personal experience of are that it will start to instil discipline, it will teach you wether a particular strategy can fit with your lifestyle for example if you have a full time job, can you get to a screen, analyse and execute every 4 hours, do you have enough time in the mornings, at coffee breaks or in the evenings when you have put in a full days work and you just want to go to bed, it's not just about a good strategy and the psychology of risk. Can you continue to trade whilst on holiday ( if you want to) is it too disruptive to family life etc, you can only find out some of these things by doing and doing on paper is the safest way to find out, especially as a beginner.

Then as NVP points out when things go pear shaped in live, excessive drawdown occurs and you begin to wonder if the strategy is failing or its mistakes in execution, time to take a breather, paper trading gives you a break and time to think, maybe even think of new ways of looking at the market whilst still keeping your hand in the market on paper.
 

Fugazsy

Well-known member
Nov 10, 2014
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The usual refuge of those who can't support their view.

In forty years of trading, nineteen of it online, I've never known anyone who learned trading by "doing" -- and by "trading" I mean substantial money, not hobbyists -- without blowing their accounts two or three times, and even then not doing much better than break even.

But if that's the route beginners want to take, nothing can stop them. Until they go broke.
No, I knew you could not resist not having your last word as usually and that is why I said it, it is stronger than yourself, shows your compulsive need to be right, which is not a good prerogatives of a decent trader and a clear signal...You cannot control the market ......

Going back to the paper trading, you can paper trade as much as you want and whatever you like but you have not traded, you have not dealt with what matters most, which is YOU, but you have only dealt with your imagination of yourself.

Paper trading will not in my opinion teach you a darned thing about the real market world. I will only give you a sense of false confidence and could very well frustrate you to the point of error.

Do you have a serious of losing trades? Reduce your risk to a minimal till you are ready again. Do not paper trade.

Here we suppose the trader has a plan, if a trader has $100000 to trade, he can start with $100 or whatever he feels comfortable to lose with. Not risking more than 2% per trade and not more than 6% per day. He will not go broke if he uses a reasonable MM method and he probably will never lose that initial $100.
If he does well he can inject more money in steps in way that make sense to himself.

In the mean time what ever happens at the end of his period monitoring himself he will have learned a lot about himself. Trading is doing it not imagining. He has not wasted time and more importantly he has not shifted his perception in the direction of imagination.

Only people with not any idea of how to trade will promote paper trading to others as brokers do giving the impression of a finer gap between reality and fiction (the gap is HUGE), brokers knows very well most traders will fail (at their advantages) when it comes to real trading after being confused with the results in paper trading, it is THEIR WAY how to hook people to trading, they brainwash people giving them the false perception that paper trading is very close to real trading. A bit of a scam

OPEN A NEW ACCOUNT TODAY, PAPER TRADING WITH $100000.
Do you know any broker which does not promote the above?

40 years in the business does not mean you have grasped it or you know what you are talking about, actually it proves the opposite where your stubbornness wanted to be right has prevailed by only making you shortsighted. You commercial status also confirms it, "if you cannot master it, teach it".

Said that I do not care if you paper trader or not, I gave my perception on the matter like any others on the forum hoping some will see what I mean which is based only on my experience in trading (I know is not conventional, but I am not a conventional man).

I do respect your opinion but please give others a bit of space to express themselves as they wish without constantly being on their back trying to impose on others something that only exist in your head.

Now to be honest if you do not mind I am not having fun in this constant ego wrestling, I would prefer more of constructive criticisms where the communication is stimulated and different experiences are shared without trying to impose absolute truths. You are not holding everyone truth here but only yours.

I will leave you and your followers to comfort each others with your likes.
 
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dbphoenix

Well-known member
Aug 24, 2003
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1,155
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I think most have agreed that paper trading is good for a number of reasons before going live. Another couple of reasons for paper trading I have personal experience of are that it will start to instil discipline, it will teach you wether a particular strategy can fit with your lifestyle for example if you have a full time job, can you get to a screen, analyse and execute every 4 hours, do you have enough time in the mornings, at coffee breaks or in the evenings when you have put in a full days work and you just want to go to bed, it's not just about a good strategy and the psychology of risk. Can you continue to trade whilst on holiday ( if you want to) is it too disruptive to family life etc, you can only find out some of these things by doing and doing on paper is the safest way to find out, especially as a beginner.

Then as NVP points out when things go pear shaped in live, excessive drawdown occurs and you begin to wonder if the strategy is failing or its mistakes in execution, time to take a breather, paper trading gives you a break and time to think, maybe even think of new ways of looking at the market whilst still keeping your hand in the market on paper.
Exactly. One can approach trading seriously by studying, developing a trading plan, practicing, and eventually trading in small amounts without fear, preferably in a feedback loop that keeps him linked with reality. Or one can approach trading frivolously, jumping in with little or no preparation, trading in a perpetual state of fear, eventually losing that "money he can afford to lose". Yes, the latter may eventually after years of effort and losses figure it all out. Some do. Most quit. But unless one has a thick streak of masochism, there's simply no reason to put oneself through the grinder. Plenty of people do. One can read their stories here and in similar forums every day. The failure rate among traders is what it is for simple and obvious reasons.

It is of course a matter of individual choice. Those who want to become professional poker players will at least seek to learn the difference between a straight and a flush. Others will arrange their cards "at random" and wing it. Some will consistently bet on the prettiest horse. Others will rely on their lucky socks. It's the way of the world.
 
Nov 22, 2016
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Nice discussion is going on here. I hope the newbies will pay attention to this.
 

progix

Active member
Feb 25, 2016
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I believe that many traders looses money in start but eventually these traders have to let go off these losses if they wishes to become successful in future.
 
Apr 19, 2017
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Losses are part of every business and are more like opportunities to learn and grow. It is rightly said above that losses are merely like start up cost for business. So one must not get discourage and with consistent efforts try to recover these loses.
 
Apr 17, 2017
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though losses are inevitable in beginning and even in later stages, it still can be minimized by proper risk management. Newbie should take calculated risk and put a small amount of money to start. Focus should remain on learning more.
 
Apr 19, 2017
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though losses are inevitable in beginning and even in later stages, it still can be minimized by proper risk management. Newbie should take calculated risk and put a small amount of money to start. Focus should remain on learning more.
Very true! Losses are inevitable at every stage of forex trading. Even if you have best trading system then also losses can occur if you fail to manage your risks properly. Risk management can be through limiting trade lot size, using stop loss, having proper risk/reward ratio and using optimal amount of leverage. Most importantly, do not invest more than what you can afford to lose.