[gosu]

Originally Posted by TimRacette »

Ya gosu I'm just saying I found ETFs a nice alternative to trading 1 or 2 lots because I was able to scale out. Obviously everyone is different. You could certainly trade 10 lots with a 10k account if you're controlling your risk right? Just my opinion.

Sure Tim, you could do 10 with 10K if your broker allows that and if you knew what you were doing. However, I was under the impression we were talking about someone going from sim to live for the first time.

It's just my opinion that I think trading a 1 lot with a small account is better than trading an ETF which requires 25K. The nature of being a novice is such that any amount he puts into an account has to be considered at risk.

You emphasize scaling out as some advantage. You have your reasons I'm sure, but there's nothing in my experience to recommend scaling out when trading index futures. Do you also recommend scaling in?

[TimRacette]

That makes sense, a 1 lot with a small account. I prefer to scale out because a lot of the time intermediate profit targets will be hit much more often than the larger profit target. This way I can exit 3/4 of the position and trail the rest to the larger (in my case 15-min) profit target.

As for scaling in, that's certainly a viable strategy...For Example... On the euro if you trade really small time frames (I use a 233 tick chart) you could enter 2 contracts at a larger level like a 15-min and then if the trade goes in your favor enter 2 more at the 233 tick chart entry. This way you are only risking half the position if it blows through your entry and if the trade begins to work in your favor for the first 2 contracts then your risk is reduced when adding the second 2.

For a breakout strategy I'd prefer to go all in all out as the best price would be the onset of the trade, but I see the value in both scaling in and scaling out.

[ajaxfinancial]

hello
I think that the difference between papers trading and live trading is that it allow me to gain real experience. Real life experience is the critical component of success as learned from the Rich Dad's series. I can learn all the theories about investment. I may even 'paper trade' investment. But if I do take actions to do the real things, I will never master the investment skills.
Thanks
Regard

[T2CTrading]

I think the key issue with paper vs. real trading is the psychological aspect. We are all human and when we have real money in a trade our emotions and reactions will be different than when we have "fake" money in a trade. We know the difference and for most traders just starting out, this difference will mean that they handle the trades very differently even if they do not intend to.

We need to learn under the real conditions of trading with real money on the line. That is why as traders we need to start off small, know how to control our risk, and only trade with money we can afford to lose.

I believe that paper trading "sim" accounts have a lot of value in learning the platform, watching the price action of the contract being traded and fine tuning our reaction times when entering orders etc., but have limited value in teaching the new trader how to psychologically handle a trade when "real" money is on the line.

Tristan Jeanneault
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T2C Trading