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A.J.,
In my opinion your post just showed that Mervin is completely correct.
If paper trading does not simulate the psychological element and order
placement, then the only thing left is the system itself. If the system is
bad, then paper trading will show it. In my opinion you cannot say a system
is successful unless the order placements and the psychological element are
also tested.
In regards to your last comment, whats the point of paper trading if you
don't need to do it to find out how a system performs? The reasons you give
for doing it are all psychological reasons even though you have already
said that paper trading doesn't simulate this.
Regards
Simon Trevor
>Tin Mervin Yeung wrote:
>
>> Paper trading is useful only for proving that a particular system is
>> useless.
>
>I disagree. The only real differences in paper trading vs. the real thing is
>(a) the psychological element, and (b) order placement. Now, some traders
>have more problems than others overcoming the pressures of trading with real
>money on the line, and while paper trading does not simulate this very well,
>it still can help to "pretend" you're playing for real. The art of order
>placing can only really be learned through experience as well, but one can
>still have a rough idea of what would transpire by just viewing the market in
>something. As far as technique is concerned, there really isn't any
>difference - and in fact, good strategies are developed upon reflection and
>testing anyway, and the paper trade allows one to (a) get a taste of how they
>work in real time, and (b) get a feel of what it is like to handle the
>decision making process while trades present themselves and while they are in
>progress. If a system or approach is useless, though, it doesn't require
>paper trading to disclose this.
>
>Regards,
>A.J.
>
>
>
_ .
Simon Trevor ,~' (_|\
s335159@xxxxxxxxxxxxxxxxx ,-' \
Manufacturing & Materials Engineering Student ( * <--Brisbane
The University of Queensland \ __ / Australia
\,~' "\__/
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