|
PureBytes Links
Trading Reference Links
|
Mitch
>
>> Paper trading is bull---- by the way.
>
Paper trading is not bull. It is a systematic analysis tool: it's a
negative filter.
If one has an idea that appears to be profitable, then one should test
it. To test a human process, which is what trading is, one needs to
perform both positive and negative tests against both the mechanics of
the activity and the human's ability to perform those mechanical steps.
Put in less vague terms, you have to see how well the system works when
it works, how badly it waxes you when it doesn't, and how easy it is to
use day after day.
Paper trading is an excellent way of identifying when an idea is a
stupid one. If a signal or behavior or indicator can't stand up to
paper trading for whatever reason, it's a good thing you didn't attempt
to waste real money on it. It's one of the more efficient ways I've
seen of throwing away bad ideas; it's fast and effective.
Paper trading is NOT a good way to determine whether an idea will be
successful, however. It's a negative filter: it tells you when the
idea sucks, not when the idea is great and profitable. If a method
passes paper trading tests, then there are other tests necessary to
demonstrate success, including (hopefully)limited-capital exposure in
real trading.
But it's not bull unless it's mis-used.
Troutman,
Mitch is actually right.
In paper trading one is driven by a will to succeed. In real trading
one is driven by the fear of losing.
And that, Sir, makes all the difference in the world.
Dr.Narayan.
Mumbai, India.
______________________________________________________
Get Your Private, Free Email at http://www.hotmail.com
|