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Eric wrote:
>
> Bando57@xxxxxxx wrote:
> >
> > Here's my thoughts on paper trading vs. real trading....
> >
> > You can paper trade until you've killed a sequoia redwood and you still wont
> > know if you can trade realtime...
> >
> > Rick
>
> My favorite analogy on the matter is that paper trading gives you no
> more liklihood of being successful in real time than living together
> gives you more success at marriage. Its fun , but it ain't the same, no
> matter how long you do it.
>
> Eric,
Your point is well taken, but who says it has to be exactly the same?
Is there something wrong with first learning to ride a bicylce using
training wheels before going on two wheels? You are right it is not the
same. But, folks trying to learn find themselves at different levels of
development and may need those training wheels to get started and to get
a little bit of the feel for what it is like to trade. I paper traded
for about five years as a teenager before actually trading. This was
good training for me to familiarize myself with the market. I also lived
with
my future wife for five years before we got married. Insisting on
someone being able to tolerate me for five years, I was able to
eliminate several prior candidates who couldn't stand the test. My wife
and I have now been
married for twelve years. We have been thru good times and bad and we
are
still together.
Paper trading is a valid and worthwhile way for beginning traders to
learn about the markets and go thru the motions of trading. The more
disciplined the trader is in following strict rules which similate
actual trading the more likely they are to have the discipline to be
successful traders. Those who complain that paper trades are nothing
like real trades have not developed or maintained trading rules that
similate an actual trading enviroment. By charging yourself commissions,
a high slippage factor, and insisting that real time prices exceed your
limits in order to record a fill, a near simulation is a very real
possibility.
If you adhere to these parameters, you should have a virutal simulation
of real market conditions. Given this, if you can make substantial
"paper" profits using at least 5 to 1 equity to margin requirements,
over at least a six month period, you probably have a winning method of
trading.
Virtually,
Norman
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