How easy is paper trading, really?

Quantt

Active member
Jul 23, 2017
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#17
It was around twenty grand in total (10k real & 10k paper). I've been trying out different strategies for about a year with small accounts to see which one suits my personality the most & to get a feel of different markets @ different time frames.
I guess all depends on the person and the amount of money... when I was starting long time ago, after reading some books (no YouTube back then ;-) and thought I had a strategy and started trading for sure I got excited when I was +$1000 and felt like $hit when I was -$1000, especially few days in a row (here goes the family vacation :)

But overtime you've seen it all and those become just numbers, some days, I don't even bother to check if I am up or down for the day and sometimes I even forget I have open trades until I get sms about a filling... I do check once a week all trades (if any) and keep a meticulous record: execution, size, buy, stop, sell, etc...

EDIT to clarify: In my case I am fully systematic/automated, so this helps me a lot with the psychological mambo jumbo...
 

Brumby

Well-known member
May 25, 2012
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#19
I switched between trading with real money & using paper every month for 8 months to see if "emotion" had any impact on my results. It turns out I actually made more money when I used real money than when I was trading with a paper account. Of course this could have just been a total fluke, but I bet if you get more beginners to try this method they'll get similar results.
Your primary assertion is that emotions do not impact a trader's performance. Your opinion is totally inconsistent with the body of evidence in the trader universe and would be an anomaly. Given that you are drawing such a conclusion based on 4 months of actual live trading (since you were alternating) I would explain it away as simply lack of sufficient engagement experience at your end. I am not discounting your personal testimony but when you are going against a predominant position, you would need much more substantial evidence than simply some limited engagement with the market on a live basis.

The other point I want to bring to the table is that random distribution of events (some may call luck) plays a much more significant role in short term results than is generally acknowledge. Below is the result of research study to demonstrate how randomness impacts the result of even a positive expectation system based on 100 traders trading 250 trades each.

 

LP2

New member
Apr 10, 2018
9
1
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#20
Your primary assertion is that emotions do not impact a trader's performance. Your opinion is totally inconsistent with the body of evidence in the trader universe and would be an anomaly. Given that you are drawing such a conclusion based on 4 months of actual live trading (since you were alternating) I would explain it away as simply lack of sufficient engagement experience at your end. I am not discounting your personal testimony but when you are going against a predominant position, you would need much more substantial evidence than simply some limited engagement with the market on a live basis.

The other point I want to bring to the table is that random distribution of events (some may call luck) plays a much more significant role in short term results than is generally acknowledge. Below is the result of research study to demonstrate how randomness impacts the result of even a positive expectation system based on 100 traders trading 250 trades each.

I'll carry on trading to see if I get the same results. I already had a strong gut feeling that the results would turn out the way they would before I even started.

I'm thinking of pushing myself even further by trying to trade in a way that would cause as much psychological pain as possible...got any recommendations? (it must be a form of day-trading with strict risk management & a simple set-up)
 
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Brumby

Well-known member
May 25, 2012
600
136
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#21
I'll carry on trading to see if I get the same results. I already had a strong gut feeling that the results would turn out the way they would before I even started.
Just carry on doing what works for you. If it was luck than by definition it will run out. If you do have an edge than the results will testify to it.

I'm thinking of pushing myself even further by trying to trade in a way that would cause as much psychological pain as possible...got any recommendations? (it must be a form of day-trading with strict risk management & a simple set-up)
When you engage in this business long enough you will eventually realise trading being a performance activity is simply about "you" the trader and all the problems associated with your own personality. If you wish to increase the intensity then it is a function of frequency and time frame. It is intuitively obvious that the intensity of the engagement is different between trading a 5 min bar versus a daily bar.
 

LP2

New member
Apr 10, 2018
9
1
3
#22
When you engage in this business long enough you will eventually realise trading being a performance activity is simply about "you" the trader and all the problems associated with your own personality. If you wish to increase the intensity then it is a function of frequency and time frame. It is intuitively obvious that the intensity of the engagement is different between trading a 5 min bar versus a daily bar.
I would respectfully disagree. The market doesn't care about your personality & it won't adjust to your style of trading - you have to adjust to it. Just a bit curious... are you a profitable trader yourself? If so, how long have you been trading for?
 

Brumby

Well-known member
May 25, 2012
600
136
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#23
I would respectfully disagree. The market doesn't care about your personality & it won't adjust to your style of trading - you have to adjust to it.
You are confused. Point out to me one statement that I made that even remotely suggest that the market has to adjust to the trader.

Just a bit curious... are you a profitable trader yourself? If so, how long have you been trading for?
18 years - full time.
 
Sep 9, 2010
44
1
18
Compton, Ca.
#24
Paper trading

I know this may be hard for some of you to believe but I can execute any plan I set (as long as it's mechanical & doesn't involve too much discretion). I don't think emotions play that big of a role to the point where someone who makes 100%+ P/A on a paper account can go to averaging 5% P/A (if they're lucky) when trading with real money.

If it's true that you can make money trading common chart patterns (breakouts, complex pullbacks, etc...) & the only thing stopping the average punter from making 50%+ per year is their inability to follow their plan properly then surely people would be able to generate 300%+ returns on paper accounts where there is ZERO emotion involved?

There's only 2 conclusions I can draw from this: either you can't make money in the stock market using T.A. patterns (the ones which do are outliers) or the people who claim that paper trading is easy are just lying to fit in & not feel like sore losers (also highly unlikely... or is it?).
In my experience I think paper trading is a cursing, and a blessing.
First start with the cursing one can paper trade and make good profits, have a good system, risk management, but the cursing is when you go live with real money that will change because now your emotions are involved where as with paper trading the emotions are not there it's like playing monopoly. If you are not careful you go back to paper trading for long periods of time trying to figure out what's wrong.
The blessing have a system you believe in and tried, proper risk management that is risk no more than 1% of account equity
Go lived with real money do a series set of trades in twenty, keep good notes on each trade. Now lets say you lost all twenty trades you will be way ahead than all the paper trading. This is what I had to do and it's working.
One can talk, read, pretend about swimming, but until you dive in the water either you will swim, or sink.