Revelation from the professionals

[roguetrader]

Starspacer, stops as such are really academic in the context of this example, the point i am making is that to derive any real benefit from paper trading you must discipline your self to do exactly the same in one as the other so in this case you exited because the price action was not behaving as it should, this I understand, I do not necessarily let a stop be hit on an intraday trade if the market dynamics suddenly change. The point is if the instrument was not behaving as it should then it was not behaving as it should and would trigger an exit in cash or paper.
If a pilot in a flight simulator is approahing the runway too high or too fast he calls a nissed approach and goes around again, in order to drill the procedure. He doesn't say "Oh well we can't die, let's stick it down and see what happens." In your situation you described the price action will look the same whether you have money on or paper, because that is the price action. The only difference between the two senarios money or paper is fear.

 

[starspacer]

The only difference between the two senarios money or paper is fear.

Yes, agreed, but that makes all the difference and, in my view (mechanical systems excepted) makes paper trading a poor substitute. This is most valid for a volatile instrument like Nymex, where, on paper, you can calmly watch the trade spike +/- 3% and not be effected. In a real money situation, price action can still be ok, but emotions far from. Without labouring the subject, I simply agree with (in my view the best traders of all time) Livermore and Smith and will quote Livermore:

[there was] a man who was going to fight a duel the next day. When asked by his friend if he was a very good duelist, he boasted that he could snap the stem of a wineglass at 20 paces. His friend, however, was less than impressed and shot back, "But can you snap the stem of the wineglass while the wineglass is pointing a loaded pistol straight at your heart?"

Gary Smith said that he knew some super paper and simulated traders who "have an uncanny ability to call market turns. Yet they fail miserably whenever they put their own money down on the trade".

I know that there are lots of people who will disagree with me on this. All I can say is paper trading doesn't work for me, but if it works for you, terrific.

 

[starspacer]

No losing Trades

1. I've never been a losing trader as I paper traded first till I was really very consistent.
__________________
Mr. Charts
US Trader and Coach

I agree with Mr Charts that it is possible to have a sustained period of winning trades. I believe Gary Smith has only had 2 losing months in the last 10 years or so. Smith also relates how Gil Blake had 134 out of 139 winning months.

 

[Mr. Charts]

Just to add a little clarification if any is needed, to my comment quoted in the previous post - self discipline and emotion control is required when making the change from paper trading to real trading - but if you can't be
a) profitable paper trading,
b) self disciplined,
you are not terribly likely to succeed in the real world.
Richard

BTW, re-the comments about 12 year olds
My methods are NOT a "system" nor a "game" so I stand by my comments, though I do understand what you are saying Gamma ;-)

 

[SOCRATES]

Consistently successful trading requires not only the above, but also the development and mastery of a special kind of perception. This eludes most ordinary people because they limit themselves to the ordinary type of perception they utilise for everything else. In persisting in this way, they prevent themselves from not failing, and hence, ultimately succeeding.

 

[barjon]

Remember Doug Sanders who missed a 3 foot putt to win the open? He'd spent thousands of hours "paper trading" on the putting green slotting in the 3 footers with ease. He "forward tested" on the course holing hundreds of 3 footers when it didn't matter too much or when the stakes were much less. Come the biggest day of his golfing life and up jumps the pressure (emotions) to bite him.

I know I can never trade without emotion. The best I can do is to keep it to a small "e" and I do that by never taking a bigger risk than I feel comfortable about losing.

 

[SOCRATES]

This is because you did not pay attention to the many posts I made in the past to help you conquer this problem. There is not one "e" but several.

emotion

ego

evasion

enthusiasm

eagerness

expectancy

eclectivism

ecstasy

exciting

empressment

for starters, rather than echt or eigen for preference.
I am tired of giving explanations, but sadly, to no avail.

Kind Regards As Usual.

 

[barjon]

Socrates

Paying attention is one thing - putting it all into practice is another

jon

 

[zzaxx99]

This is because you did not pay attention to the many posts I made in the past to help you conquer this problem. There is not one "e" but several....

empressment

One of the major concerns is being forcibly made an Empress??

I can find "empressement" (excessive cordiality) or "impressment" (The act or policy of seizing people or property for public service or use - ie, press gangs), but no empressment - what is it?

 

[SOCRATES]

Paying lip service to a daunting requirement but skirting around it and ultimately not doing it.

 

[Mr. Charts]

ecstasy?
I'm not good enough to that and trade at the same time..............;-)
Richard

 

[barjon]

Paying lip service to a daunting requirement but skirting around it and ultimately not doing it.

No, no - understanding the requirement, trying hard to achieve it, but not yet successful. Rome wasn't built in a day

 

[barjon]

ecstasy?
I'm not good enough to that and trade at the same time..............;-)
Richard

....and I thought you were a man of many talents

 

[SOCRATES]

Ecstasy and its implication in continuation trading

ecstasy?
I'm not good enough to that and trade at the same time..............;-)
Richard

Hello Richard,

I included ecstasy because it is a precursor to gloating, which is what many people do when they do a good trade or trades, and this is an abstract disabling nuisance that interfereres with the need to keep a constant impartial posture for the trader when engaged in continuation activity.

Kind Regards As Usual.

 

[knucklehead]

1. I've never been a losing trader as I paper traded first till I was really very consistent.

Beginners should always paper trade before moving onto psychological and emotional issues in trading.

 

[henry766]

socrates , i agree with you in that so many people distract themselves with all sorts of rubbish , ( so much time spent on money management etc) there is only one thing we need and thats winning trades , we should spend 99.99% of our time ensuring this , which will take some insight and thought , but is the only way , but your distracted yourself with all this emotional control stuff, in my experience if you win most of the time the rest is easy , irrelevant almost , though of course you have to patient and in control i don't believe thats hard to find when you know if you stick to your idea you'll mostly win!!! it sounds obvious , trading is about winning .