who should I give my hard earned to?

all trading is gambling - but professional traders make money - every day of the week, week in, week out

in the same way that casinos do - since the professional traders move the odds to their side

gamblers dont last long in the markets - but learners who keep using the minimum trade size for a year - may learn to become traders if they back that up with a lot of homework to work out why they keep losing
 
sidinuk said:
Backtesting, in my view, is essential. You need to know that your idea has at least made money in the past. The only way to know it makes money in the future is to trade it. Paper trading is exactly the same as backtesting, it tells you nothing that you don't already know, all your doing is extending your backtest period.
Click to expand...

This is my point entirely: and maybe what I meant to say, or did so badly :eek: . I see no reason as to why any formal of continual testing cannot be beneficial, in some way. Even when applied through "a lack of confidence" (and it is really good to see above that so many positive, ballsy, wheres-my-next-million-coming-from traders contributing to the website ;) )

sidinuk said:
You learn far more when you actually start trading a system..
..Great results in the backtest but when you trade it you find that the slippage is way more than you anticipated. Paper trading couldn't tell you that, only real trading. How about the wild swings in forex around economic announcements? on paper you can handle that no problem, in reality even with just 1 contract, losing $1000 in 30 seconds might freak you out slightly.
Click to expand...

This is by far the most compelling reasoning, imo, as to why paper-trading and actual trading are different: the market mechanisms (as oppossed to those who simply refer to the physciological aspects of trading. I believe these can, and should, be differentiated from underlying TA itself). This reason is not one that I had considered, which is why I like this board :)

I would still contend that the value of $1000 in whatever timescale is irrelevant. The relevance only comes from the capital base that is risked; the percentage risk. I would be chilled if it was $1000 from my $1m cap pot, whereas I'd be sweating cobs if I was down to my last measly $1000.

sidinuk said:
For each of my systems I compare each days actual traded results to the theoretical results that I obtain by using the exact same mechanical method that I used for backtesting. Only then do you know whether reality can match theory...
...Of course, systems are always evolving as more and more data (each day) becomes available.
Click to expand...

Again, running paper-trading alongside actual trading allows comparison between different systems / indicators / etc. It also allows you to look at the borderline trades that were not taken.

Prob most importantly, for me, it has continued to ensure that the knowledge of TA is broadened and evolved. As stated above, I have found it useful for understanding different indicators (most of which I do not use: but Id rather know about them than not): but maybe this is what still classifies me as a newb.. I dont know it all, I want to learn, and still enjoy learning. And I can do it whilst still being in the game.
 
" all trading is gambling - but professional traders make money - every day of the week, week in, week out "


Almost any human activity could be deemd a " gamble " , but that is a misnomer .

It is the attitude to trading that counts , a responsible trader , reduces the risk as best he can and aims for more than that in return.

A gambler has no regards to risk , he is only interested in " making it big " . It's a question of choice and I certainly reject the Gambler's way .

And many so called great institutions have gone bust very quickly due to the above attitude . See : barings , LTCM , vic niederhoffer , the losses of various bank who don't have to disclose their trading accounts . etc

Just because one uses the label " professional " , doesn't mean he isn't a gambler at heart , only he can answer this .
 
wisestguy said:
" all trading is gambling - but professional traders make money - every day of the week, week in, week out "


Almost any human activity could be deemd a " gamble " , but that is a misnomer .

It is the attitude to trading that counts , a responsible trader , reduces the risk as best he can and aims for more than that in return.

A gambler has no regards to risk , he is only interested in " making it big " . It's a question of choice and I certainly reject the Gambler's way .


If you say that all trading is a gamble then you don't know what trading is about,trading is about perceiving a picture in its infancy in your mind and acting on the perception of that picture,it is an art.If you don't have any perception of a picture then you are gambling.
Click to expand...
 
llew ,

Your message is ambiguous , and who is it directed at ?.

If it is me and you are saying that I advocate gambling the markets , you are wrong , my position is opposite to that . please re-read my posts and keep up with the conversation.

you are in fact agreeing with me .
 
All speculative markets attract gamblers as well as traders, they all help to make the market. The difference between gamblers and traders is similar to a roulette table in a casino. The casino and the punter are both betting on the outcome of the spin of the wheel, the difference is that the odds (the edge) is on the casino's side. The casino is running a business (letting the edge play out), the punter is gambling.

In trading if you have an identifiable edge which you are exploiting day in day out then you are running a business, if not you are gambling.
 
Zenda & BBB

I agree, I would not consider myself a newbie, but I still make less from trading than my day job so I am hardly a seasoned pro either and I am still learning after 4 years and still making mistakes.

I have never paper traded, I would find it boring, and frustrating. After all everyone does this for one reason and one reason only, to make money. You can't make money unless to risk money, some will succeed some will fail, but those who daren't put their money on the line for fear of failure, I feel may not have what it takes to succeed.

I may not either, but at least my way I will know sooner rather than later.

Dave
 
sidinuk said:
Well my theory is ok but in practice nobody is going to admit that they are gambling are they?
Click to expand...


no not really , there's no shame in admitting it . in fact I would resect a gambler more if he were to be honest.

some have already admitted as much , though of course now that you have put it that way , they are all going to start retracting what they said .

ahhh , such is life on the net .
 
Paper trading is about as helpful as backtesting.

Neither guarantee how you would react in the real world when your playing with the real men. Neither help you develop the reactions and composure required when some of the sharpest people out there are trying to rob the shirt off your back.

The way some of you argue your case suggests to me that your all at the early stages of trading, and you are (mostly) trying to predict market direction. Thats why paper trading is so important to you. You need to feel that you can 'predict' the direction of the market. You are analysts playing with money, not traders. You are the gamblers because you are putting your faith and money in the past. A trader is a trader because he knows how to manage himself and his money, AND HIS TRADE, and doesnt care much for the direction of the market. Why should he? he cant control the direction can he. So why put faith in some paper trades made last month when the market was at a different level, behaving differently and he didnt have the same amount of capital????

Dont worry folks, Im not having a go. What your going through is a natural progression. Soon you will realise that trading isnt about making sure your 'system' can predict market direction enough times to give you a positive expectancy, and you may start to become traders.

Be lucky!


PS Do you think the Roux brothers or Gordon Ramsey got where they are by reading a few Delia Smith books???
 
See BBB, to me this is where the fine line between gambling and trading becomes blurred. If I am reading you correctly then you are saying that you can't predict the future from the past so why bother. The market does what the market does and a trader reacts to it. To me that is gambling. If you have no predetermined plan, you are just reacting to what the market has already done.

I agree that the past cannot predict the future (which is why TA is total rubbish, but that's another thread). However you need to have some comfort that what you are doing is likely to make money. OK so you don't believe in backtesting but how have you developed your methodology?

If you didn't backtest then you must have just started to trade, fair enough. Probably, you had a few winners and a few losers so you looked at the losers and saw where you went wrong and tried not to repeat those particular trades. After a while you refine what you are doing and can recognise situations that are more likely to be profitably than not. Backtesting just saves time and money on the early trades where you really don't know where your profit is going to come from. You start trading at least knowing that in the past what you are doing made a profit (in reality all sorts of things could upset that cosy picture). Real trading then helps to refine those ideas.

Of course nothing is guaranteed, just because an idea has made money in 35 of the last 36 months doesn't mean it will continue to. That is why it makes sense to develop many different types of system over different instruments and different time frames - as the old cliche says: don't put all your eggs in one basket.
 
Kind of.

As we agree, we dont know where the market is heading next. As we know, some people who manipulate crowds on this bb have attempted to predict where the market is going next, but they have 'come a cropper' and lost a lot of face (as I correctly predicted hahahhaha - just to see them scuttle off to another BB). So, what we do is say if the market does this, I do that, if it does something else I do tother. This is the plan. How is the market ticking? is it strong? is it weak? is it fast? is it slow? (looking back at your paper trades will NEVER be able to tell you where the market ticked or how strong/weak it was). Do I want to be in or out? How far has the market moved since entry? How far does it tend to move against me?

A lot of this is based on experience - a lot is based on keeping records of past trades - this helps me keep track of changing patterns in the market - rather than a one size fits all approach that systems 'proven on paper' tend to enforce - as if the plan will work for ever. Look at ER. Tends to change what it does every 2-3 days. When I see that trends are lasting longer I will try to stay in longer. etc.
 
there is a massive difference between paper trading, back testing by a learner, or a professional trader checking out / back testing a possible strategy

paper trading is a complete waste of time
back testing by a learner is a complete waste of time

but a professional trader who understands liquidity issues and understands how misleading looking back at a chart can be - will use their experience to at least work out if a methodology is worth trying or not at all

but at the same time - no matter how good it seems - when a professional trader checks that methodology out in the markets with real trading - he probably expects it to fail - but is real happy when it works

so the key - is that the people who go on about how good paper trading is are ones who are either learners, or who have tried to trade for real and just cant do it - and then slip back into the paper trading idea so that they still feel they are part of trading - and i doubt that the ones who do this will ever make it

and a professional trader talking about back testing is a whole lot diferent to someone starting out talking about it, as the professional just looks to get a feel for wether the idea will work - they dont look for an exact answer because they know that real trading is just so much different
 
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Hi Sarah,

I hope you don't mind me sending you this PM, but I notice that you posted a question about training choice and expenditure. Did you receive the answer you were perhaps looking for?

I don't post public anymore on the BB since I was mauled by a certain member, who I notice has made various comments reference your question, which frankly don't really help you IMHO.

I thrashed around on my own for over 2 years and wondered why I couldn't get trading quite right, I just wasn't going anywhere! I'd read lots of theory and I thought I'd cracked it when I had a few good trades, but no, I soon lost it again. I really didn't know what I was doing in truth.

So I started to look around to try and find someone who could teach me what to do. I didn't know about this BB at the time (come to think of it, I don't think it was around then!), eventually, I found a professional trader and trainer called Hugo Lawrence, exchanged many emails with him and eventually had a long chat with him before I decided to go on one of his courses, maximum of 10 people, only 4 on my course, 1+1 for the advanced version . I doubt if you will have heard of him he doesn't advertise anymore, most people go to him now because he's been recommended.

I liked him from the off, he didn't try to sell me anything and patiently answered all my queries & questions. I got on quite well immediately coming off his course, things started to make sense and I was able to cut many corners (I don't think I'd have been able to do that if left to my own devices).

His course is not cheap, but the content of his course notes are excellent. No glitz or glamour, just pure facts, illustrations etc. Well worth every penny I spent, I began to understand trading, perhaps for the 1st time. You can keep in touch with him for as long as you want/need his advice after the course.

I paper traded for some time before risking any capital. I don't agree with some of the acerbic comments in response to your question. Why risk money before you know what you are doing!

Yes, fear of losing does come into it, but first, know what you are doing and why you are doing it. Only then will your confidence be high enough to start trading your cash.

I don't know either Alan Rich or Sandy Dajeda, however, there are planty of comments made about both of them on the BB to make a decision I would have thought. I can't remember any negative comments though. Whoever you choose, they will only train you to trade in the way they trade, it's up to you which method you adopt. So perhaps ask some questions first. What do they teach, one trading method or several? Do they train more than they trade, if they train more than they trade, why is that, you know what they say, all trainers are failed traders - I don't think that's true, are all driving instructors poor drivers? I don't think so! You get my drift.

There are however, a few charlatans about, Stanzione, Winters etc. But there are a few good trainers out there too, just be sure you choose the one that's right for you.

I hope this has been of help to you and what you wanted to read.

Trading is very hard when you first start but stick with it and have fun. Good luck to you.

Best wishes,

Sally.

PS Incidentally, if you wanted to have a look @ Hugo's site it is: www.trade4cash.com I understand he doesn't do seminar courses anymore, you have to go down to Mid Devon. I've never seen his name mentioned on this BB either, which I think is a positive, bearing in mind that most trainers are treated with little or no respect here it seems to me. They all seem to be tarred with the same brush as far as I can see, hardly fair is it? But that's life!
 
That's a very sensible post , sally T .

I would just like to add the following :

the point here is not Paper trading Vs real trading , no one is advocating NOT trading for real . that's ridiculous and a complete misnomer.
----------------------------------------------------------


So the original point : is there any value to paper trading for the begginer ? in my view and for reasons said , I believe there is, especially when you have nothing to lose.

Also , paper trading is done on REALTIME markets , not on past chart : that is backtesting , that is DIFFERENT .
So with PT you can simulate many trading issues, barr the real money ones.

A lot of people have said : PT cannot simulate the " emotional " side of trading .

Well , I think that is a good thing , because a good system trading in the real markets will REDUCE the emotions to controlable levels . To be emotional during real trading is bad .

I would certainly not want any begginer to feel these " emotions" w/o adequate measures to control them , which inevitabley will lead to disaster , and that is what will happen if you dive right in .

The other thing is : In my view charts are not useless , they are one of the few indicators that have true value.

history DOES repeat itself , though not precisely , the broad trends are there . this has been proven.
 
Personally I think that there is some value in paper trading and it is this:

If by paper trading you cannot make a profit then completely forget about being able to make profit trading with real money because you will definitely lose.


Paul
 
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