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Eric, Rick, etc.
I am a good example of the "paper trading' discussion. With a $10,000
account and a full three months of paper-trading an extremely successful
S&P day trading system, it took us two months and about 30 trades to run
that account to $1,300. Granted, some stupid mistakes were made such as
my partner's thinking a 200 point stop-loss would give our positions
more breathing room rather than the 50 points we tested, (three losing
trades of about 600 total points brought him back to his senses) and my
forgetting to place a stop loss (results: 150 point loss).
However, since the emotions are so difficult to put aside, there simply
is no similarity between real trading and paper trading. But, you must
test your system and one way to find out, obvioulsy, is through paper
trading.
After another cash infusion we are back at it, adhering strickly to the
rules (60 to 70 point target profits, 50 point stop loss no matter what)
and following our three indicators, emotions aside, and its working. Of
course, the answer is: discipline! discipline! discipline!
Regards,
jdfo
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