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Dear Philip,
I agree with you. Paper trading is a necessary step for the purpose of learning
the lingo, getting comfortable with a methodology (any method) and hopefully
learning discipline.
We all know that paper trading is certainly not the same as the real world but
since the probabilties favor a new trader losing money initially, I would think
that it just makes sense to start with paper.
The key to paper trading is being completely honest about it. If one is, then
paper trading can accomplish a lot.
Just my opinion.
Manning Stoller
Philip Nixon wrote:
> I don't want to bore people by coming back to the old paper trading
> argument but I think it is important. It seems to me that as we all would
> agree that back testing a mechanical system by using TS is essential then
> how can back testing (i.e. paper trading) any system or method of trading
> be wrong. I think it is dangerous to tell someone who has not traded
> before to just dive in. Even if they trade small they can still end up
> needlessly losing money and if you are limit down on a 1 lot for two or
> three days you can still lose a respectable amount of money. As so many
> have said before, it is not going to prove to you that you will make money
> in the markets but it sure as hell will tell you very quickly if you wont.
> I would suggest that anyone new to the markets should paper trade until
> they are blue in the face. It will force them to concentrate on price
> action and instill some discipline if nothing else.
>
> Just my point of view.
>
> Philip
>
> ----------
> > From: Stan Katz <skat@xxxxxxxxxxxxxx>
> > To: INTERNET:omega-list@xxxxxxxxxx
> > Subject: Trading Advice
> > Date: 29 May 1998 18:21
> >
> > I recommend the following books about trading (as opposed to technical
> > analysis): "Computer Analysis of the Futures Market" by LeBeau and Lucas;
>
> > "Street Smarts" by Connors & Raschke; "Trading for a Living" by Elder.
> If
> > you want to learn about Technical Analysis, try "Technical Analysis of
> the
> > Futures Markets" by Murphy. Avoid other peoples' systems; don't try
> paper
> > trading; and concentrate fully on how much you have at risk (and limit
> > yourself to a specific dollar risk in every trade) instead of
> concentrating
> > on how much you can win.
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