Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

Chem

Just Started Paper Trading and Thinking of Doing the Real Thing

Recommended Posts

I started reading stuff about trading about two months ago. Specifically algorithm trading. I've been working on building a profitable algorithm and have yet to find one that does well in back tests.

 

So in the meantime I opened up a paper trading account and decided to play around with that. I have pretty much no experience trading with real money. I have been trading with the paper account for two weeks. The first week I didn't do so well. Made a lot of errors while I figured out how the program works. I still managed to break even at the end of the week.

 

This week my plan was to only make realistic trades (ones that I have the capital to make with real money). I did very well this week. Way better than I expected and I ended up at the end of the week up about 25%.

 

Some things I noticed:

 

1. I did much better when I set limits and then just walked away. Meaning I waited to see a trend going, jumped on it, set limits and left. Often when I came back I would see that my limit had been met and that there may have been a point where the price was going against me (enough to tempt me to close out) but because I was not actively watching it I never closed out.

 

2. The paper trading account doesn't seem to consider the number of available shares to buy/sell? I was trading some pretty low vol futures. And I noticed that if I put in a huge order it went through right away and at one price. I'm not sure what that is called but I know that big trades end up getting spread over a range of prices. I wouldn't be trading big amounts so I don't think this would be a big problem.

 

3. My wins were small (with a few exceptions) but I had a lot of them and when I lost they were big losses.

 

One question I specifically have:

 

One trade specifically bothers me. The price had just made a big jump up. I waited to see some down resistance after the jump. When I saw that I went short. Literally a second later the price gaped up 1% then another 1.5%. I didn't have a stop set so I'm stuck at a huge loss for the day.

 

What do you do at that point? I just tried to ride it out and it did come back down but no where near enough. In the meantime I'm stuck holding these shares and can't make any new trades. I'm thinking I would have been better just closing out when it gaped up 2.5% and trying to make money shorting it on the way down from there.

Share this post


Link to post
Share on other sites

Trading live before you have a meusrable, backtested and forward walk methodology will not give you the results you want. It would be less painful to just give the money to a good charity.

 

You need proven measured performance providing consistent profitability in SIM before you risk real money. Your methodology as described has no structure, no repeateable measurable methodology and you have no idea of the math of your traders profile. IMO, witout these things you cannot make money. Two months of hit and miss and no learning cannot alow you to compete against all the smart hard working people who have spent years learning.

Share this post


Link to post
Share on other sites

So in the meantime I opened up a paper trading account and decided to play around with that. I have pretty much no experience trading with real money.

One trade specifically bothers me. The price had just made a big jump up. I waited to see some down resistance after the jump. When I saw that I went short. Literally a second later the price gaped up 1% then another 1.5%. I didn't have a stop set so I'm stuck at a huge loss for the day.

 

Hi Chem -- just a couple of comments. First, never trade without a stop...never. Secondly, at MAX Trading System we highly recommend that you stay away from any live trading until you have traded demo for at least 3 consecutive weeks--without a losing week! To skip this exercise is to invite account disaster!!!

 

There is no hurry--the markets are not leaving--they will be there when you are ready. While trading demo, it is very important to begin to get the feeling of "live" by creating a "money simulation" to help you regret losing--and stick to it. This will help to prepare you for the psychological battlefield of live trading.

 

For example, for every tick you lose trading the demo account, donate $1 (or whatever size amount works for you to make it feel "live") to a favorite charity--but it must be a large enough amount to hurt a bit!

 

For every tick gained, place the same amount in savings toward a treat for yourself or your family. At the end of each day, disburse the funds so that you feel the pain or gain of the day's results. After a minimum of 3 consecutive winning weeks, go live, but go small----discipline yourself to stick with very small trades (risking perhaps 1/2 percent of your account) until once again you have 3 consecutive winning weeks. Then begin small advances toward larger trades.

 

You will never regret taking the time and effort to trade safely!

Share this post


Link to post
Share on other sites

Hi

 

Just want to inform you for the backtesting of the any computer strategy and optimization. The is the problem of curvefitting. You optimize the strategy for the given time period that you backtested. This is why many times the strategies work in bactesting but fail to work in real time. Most brokers think that "the markets have changed" but this is a mistake. This is mostly the problem for long term strategies.

 

Short term strategies can give god yet unreal results in backtest or in real time demo for different reasons. Generally the less ticks you taking the more will the backtesting or demo trading differ from real money trading. I have seen scalping algoritms that performed excellent in demo, but with real money you will simply not get the fills as in the demo.

 

So yes you need to backtest and try in demo, but if it goes well, you still don't have a profitable strategy yet. The markets are hard.

Share this post


Link to post
Share on other sites

For example, for every tick you lose trading the demo account, donate $1 (or whatever size amount works for you to make it feel "live") to a favorite charity--but it must be a large enough amount to hurt a bit!

 

For every tick gained, place the same amount in savings toward a treat for yourself or your family. At the end of each day, disburse the funds so that you feel the pain or gain of the day's results.

 

one of the best recommendations regarding SIM trading I've seen on any site!

 

I will add one recommendation: At the moment you take each trade, "WRITE DOWN" exactly what you are "feeling"

 

i.e. are you excited... this market is going to the moon!

worried... this trade might work out.... but I've got a bad feeling about it

incredulous... WTF this CAN'T be right... this particular trade will fail !

etc. etc. you get the idea

 

If you monitor the trade... and have any strong feelings as it plays out "WRITE" them down as well.

 

Now... here is the critical part. Review each trade at the end of the day... and if you passed on the trade, exited early, did not exit when you system said you should etc... then you must donate 3x the $/tic to your charity... EVEN if that feeling resulted in you making or saving more money on that particular trade.

 

At the end of the three weeks... summarize your results (You will be amazed), make a plan as to how you will address what you have discovered, and incorporate that plan into your system.

 

Do not go live until your 3 week "treats" jar exceeds the "charity" jar. Your "charity" of choice will be very grateful 8-)

 

snowbird

Share this post


Link to post
Share on other sites
Hi

So yes you need to backtest and try in demo, but if it goes well, you still don't have a profitable strategy yet. The markets are hard.

 

Yes and no. For example, we have trained over 800 traders using the MAX Trading System. We know it is a highly profitable approach to trading the markets. However, it takes much more than great trading methods to make a great trader. The psychological elements of self-discipline, greed, fear, hope, confidence, etc are at least as important as your trading methods. So, you may indeed have a profitable strategy, and yet be a losing trader.

 

This is a big part of why we ask our students to achieve the 3 consecutive weeks of profitable demo trading using the money simulation approach. You absolutely must have some way of feeling the stresses that are generated when you trade "real money." As KalixMOR said, the markets are hard. It is a very unfriendly environment, and without a good money simulation to experience the pain of losing, demo trading is of limited value. The issue of the difference in demo and live fills does not affect our MAX traders, but the psychological issues cannot be avoided. If you walk into the live markets unprepared, you will exit the markets wishing you had invested more time and money in preparing yourself for the battle...only now you may not have any money!

Share this post


Link to post
Share on other sites

I have not posted before but thought I would quick jump in with a couple of comments. I use Tradestation and have for about 15 years so some things may be different in other platforms. When trading SIM in most platforms (especially Tradestation) if you have a limit order sitting as soon as the price touches it Tradestation executes it as filled. Most times in real trading this will not happen unless the price is racing through your limit. I have had orders in real life sitting in the ES and the price gets hit 10-15 times or more and no fill. Depend on where you are in the stack of orders sitting there. Stops, on the other hand will always get filled but often with slippage. Same for MIT orders.

 

I have been programming in Tradestation for the last 15 years and have had a really great mentor helping me as well. There are many, many "gotchas" in the way you write a trading system. It is very easy to write a system that will back test beautifully but fail miserably in real trading. The gotchas are too many to list here but I have found that for the most part people write code improperly and great ideas fail while lousy ones seem to work only because of the way the code is written.

 

Successful trading methods are very complex and hard to find. Most winning traders do not even fully realize all the factors involved in their decision making process. I know, because we have programmed what traders thought they did to trade and the results and entries were very different from what they actually did. The human brain is incredible and many traders process huge amounts of information for any simple trade.

 

If you have the psychological of a winning trader then discretionary trading is the way to go. You MUST have a winning strategy!!! If you do not have the psychological makeup required then you will fail with even the best method. In that case you would need an automated system written correctly based on a proven winning strategy- aka The Holy Grail.

 

In my opinion winning consistently in trading takes years if not decades of study and experience, definitely not months.

Share this post


Link to post
Share on other sites

Your algorithm probably isn't working because you have no trading experience. Good luck trying to compete on your own with no knowledge. If you observe successful traders, they all have a strong intuition with the markets they trade. Most of the ideas around here don't work for most, and many struggle to use the same concepts and fail miserably. The reason is consistent, they simply don't have the same intuition when it comes to trading. That just takes time. Find the successful traders around here and read their posts, think critically about what they are saying and question everything.

 

Find a market, devote your life to it, and study math and programming if you want to build a few decent algorithms. If you're not willing to do that, then save your money.

 

Just my 2 cents.

Share this post


Link to post
Share on other sites
In my opinion winning consistently in trading takes years if not decades of study and experience, definitely not months.

 

We can speed that up for you ;)

 

I totally agree about the human brain -- far better than any black box priced under $20k !

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • MNST Monster Beverage stock, top of range breakout above 60.45, from Stocks to Watch at https://stockconsultant.com/?MNST
    • there is no avoiding loses to be honest, its just how the market is. you win some and hopefully more, but u do lose some. 
    • Date: 11th July 2025.   Demand For Gold Rises As Trump Announces Tariffs!   Gold prices rose significantly throughout the week as investors took advantage of the 2.50% lower entry level. Investors also return to the safe-haven asset as the US trade policy continues to escalate. As a result, investors are taking a more dovish tone. The ‘risk-off’ appetite is also something which can be seen within the stock market. The NASDAQ on Thursday took a 0.90% dive within only 30 minutes.   Trade Tensions Escalate President Trump has been teasing with new tariffs throughout the week. However, the tariffs were confirmed on Thursday. A 35% tariff on Canadian imports starting August 1st, along with 50% tariffs on copper and goods from Brazil. Some experts are advising that Brazil has been specifically targeted due to its association with the BRICS.   However, the President has not directly associated the tariffs with BRICS yet. According to President Trump, Brazil is targeting US technology companies and carrying out a ‘witch hunt’against former Brazilian President Jair Bolsonaro, a close ally who is currently facing prosecution for allegedly attempting to overturn the 2022 Brazilian election.   Although Brazil is one of the largest and fastest-growing economies in the Americas, it is not the main concern for investors. Investors are more concerned about Tariffs on Canada. The White House said it will impose a 35% tariff on Canadian imports, effective August 1st, raised from the earlier 25% rate. This covers most goods, with exceptions under USMCA and exemptions for Canadian companies producing within the US.   It is also vital for investors to note that Canada is among the US;’s top 3 trading partners. The increase was justified by Trump citing issues like the trade deficit, Canada’s handling of fentanyl trafficking, and perceived unfair trade practices.   The President is also threatening new measures against the EU. These moves caused US and European stock futures to fall nearly 1%, while the Dollar rose and commodity prices saw small gains. However, the main benefactor was Silver and Gold, which are the two best-performing metals of the day.   How Will The Fed Impact Gold? The FOMC indicated that the number of members warming up to the idea of interest rate cuts is increasing. If the Fed takes a dovish tone, the price of Gold may further rise. In the meantime, the President pushing for a 3% rate cut sparked talk of a more dovish Fed nominee next year and raised worries about future inflation.   Meanwhile, jobless claims dropped for the fourth straight week, coming in better than expected and supporting the view that the labour market remains strong after last week’s solid payroll report. Markets still expect two rate cuts this year, but rate futures show most investors see no change at the next Fed meeting. Gold is expected to finish the week mostly flat.       Gold 15-Minute Chart     If the price of Gold increases above $3,337.50, buy signals are likely to materialise again. However, the price is currently retracing, meaning traders are likely to wait for regained momentum before entering further buy trades. According to HSBC, they expect an average price of $3,215 in 2025 (up from $3,015) and $3,125 in 2026, with projections showing a volatile range between $3,100 and $3,600   Key Takeaway Points: Gold Rises on Safe-Haven Demand. Gold gained as investors reacted to rising trade tensions and market volatility. Canada Tariffs Spark Concern. A 35% tariff on Canadian imports drew attention due to Canada’s key trade role. Fed Dovish Shift Supports Gold. Growing expectations of rate cuts and Trump’s push for a 3% cut boosted the gold outlook. Gold Eyes Breakout Above $3,337.5. Price is consolidating; a move above $3,337.50 could trigger new buy signals. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report.   Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news.   Michalis Efthymiou HFMarkets   Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • Back in the early 2000s, Netflix mailed DVDs to subscribers.   It wasn’t sexy—but it was smart. No late fees. No driving to Blockbuster.   People subscribed because they were lazy. Investors bought the stock because they realized everyone else is lazy too.   Those who saw the future in that red envelope? They could’ve caught a 10,000%+ move.   Another story…   Back in the mid-2000s, Amazon launched Prime.   It wasn’t flashy—but it was fast.   Free two-day shipping. No minimums. No hassle.   People subscribed because they were impatient. Investors bought the stock because they realized everyone hates waiting.   Those who saw the future in that speedy little yellow button? They could’ve caught another 10,000%+ move.   Finally…   Back in 2011, Bitcoin was trading under $10.   It wasn’t regulated—but it worked.   No bank. No middleman. Just wallet to wallet.   People used it to send money. Investors bought it because they saw the potential.   Those who saw something glimmering in that strange orange coin? They could’ve caught a 100,000%+ move.   The people who made those calls weren’t fortune tellers. They just noticed something simple before others did.   A better way. A quiet shift. A small edge. An asymmetric bet.   The red envelope fixed late fees. The yellow button fixed waiting. The orange coin gave billions a choice.   Of course, these types of gains are rare. And they happen only once in a blue moon. That’s exactly why it’s important to notice when the conditions start to look familiar.   Not after the move. Not once it's on CNBC. But in the quiet build-up— before the surface breaks.   Enter the Blue Button Please read more here: https://altucherconfidential.com/posts/netflix-amazon-bitcoin-blue  Profits from free accurate cryptos signals: https://www.predictmag.com/ 
    • What These Attacks Look Like There are several ways you could get hacked. And the threats compound by the day.   Here’s a quick rundown:   Phishing: Fake emails from your “bank.” Click the link, give your password—game over.   Ransomware: Malware that locks your files and demands crypto. Pay up, or it’s gone.   DDoS: Overwhelm a website with traffic until it crashes. Like 10,000 bots blocking the door. Often used by nations.   Man-in-the-Middle: Hackers intercept your messages on public WiFi and read or change them.   Social Engineering: Hackers pose as IT or drop infected USB drives labeled “Payroll.”   You don’t need to be “important” to be a target.   You just need to be online.   What You Can Do (Without Buying a Bunker) You don’t have to be tech-savvy.   You just need to stop being low-hanging fruit.   Here’s how:   Use a YubiKey (physical passkey device) or Authenticator app – Ditch text message 2FA. SIM swaps are real. Hackers often have people on the inside at telecom companies.   Use a password manager (with Yubikey) – One unique password per account. Stop using your dog’s name.   Update your devices – Those annoying updates patch real security holes. Use them.   Back up your files – If ransomware hits, you don’t want your important documents held hostage.   Avoid public WiFi for sensitive stuff – Or use a VPN.   Think before you click – Emails that feel “urgent” are often fake. Go to the websites manually for confirmation.   Consider Starlink in case the internet goes down – I think it’s time for me to make the leap. Don’t Panic. Prepare. (Then Invest.)   I spent an hour in that basement bar reading about cyberattacks—and watching real-world systems fall apart like dominos.   The internet going down used to be an inconvenience. Now, it’s a warning.   Cyberwar isn’t coming. It’s here.   And the next time your internet goes out, it might not just be your router.   Don’t panic. Prepare.   And maybe keep a backup plan in your back pocket. Like a local basement bar with good bourbon—and working WiFi.   As usual, we’re on the lookout for more opportunities in cybersecurity. Stay tuned.   Author: Chris Campbell (AltucherConfidential) Profits from free accurate cryptos signals: https://www.predictmag.com/   
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.