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I have heard that women are more willing to admit when they are wrong, and to act accordingly to change their position -- something to do with ego (men's), I believe.
Thanks so much for your advice not quitting my job! I realized the fact that the more pressure I put on myself to make it works, the sooner I will fail and feel disappointed. It’s definitely not easy and not something you could prove that it would work or not within a short period of time. I’ll not open a live account until I can see it works though.
I’ve started my journal since day 1 and just added my journal to this forum a few days ago. The feedbacks I got so far from this post have been amazing. Thanks again!
Thank you for recommendations! Since I won’t trade real money until I feel confident enough with paper trade. Do you have a suggestion of how long I should be in profit with paper trade until start trading with real money?
No, absolutely not. Becoming a full-time trader takes soooo much time and you risk losing a large chunk if not all of your money. Family first bro. You don't just decide you're going to trade full-time. Learning how to profit consistently enough to make a living takes a lot longer than 2 months on paper.
My experience is that paper trading has limited to no value. Actually it could be worse than no value, since many people have success at paper, and that gives them false hope and confidence that real trading will be similar (easy).
I always tell people "I know a lot of simulated trading millionaires, but only a few real money trading millionaires."
Of course, then the question becomes: how do I know I have a method that works?
I personally use backtesting to validate my strategies before I go live, but I am algo (rule based) trading.
You'd have to ask the discretionary traders (chart readers) on this site how they validate an approach before going live.
There are many reasons that paper trading is difficult to translate into real money results. The primary reason though is that most paper trading simulations involve larger amounts of capital then most traders actually start with. As a discretionary trader, there is a significant difference in risking 3% per day on a hypothetical 50k account and risking 10%-15% per day on the type of small accounts that most traders are likely to start with. What many traders tend to do is achieve a certain level of success on the simulator trading 50k or 100k and then they try to start with a small to tiny account with the hope that they will have a good run at the start. Any minor adversity is likely to either blow out the account or cause the trader psychological stress.
The time spent in simulation is not as important as the quality of the simulation but it must still be long enough to be relevant. In general, you don't want to simulate for too short a period or too long a period. The amount of time that one needs to simulate is based on the degrees of freedom (variances of variables), number of trades, and market structure. I think for day traders around 90 days is a reasonable simulation period provided that certain targets are met, processes are refined, and variances are understood.
I think something to be aware of is that it is possible to have "successful trading". However "successful trader" is the result of an end-point target which cannot be known or completely controlled for. For example, a trader may have success over many years but then lose a lot. They were good at successful trading but it still did not assure that they had a "successful trading career". Because "successful trading" is perhaps easier to define and work towards, it probably makes sense to make that the focus objective.
The critical factors for translating simulated experience into real money experience would be sim trading in as identical as possible conditions as you will go live. In detail,
1. Having a realistic fill engine.
2. Same starting balance, daily loss limit, products traded, etc.
3. Same methodology
4. An understanding of factors relevant to success. This means labeling trades, tracking the factors and reasons for them, etc.
5. A reduction in variances. A variance is anything that can vary. For example, if you train to trade for a fixed 4 tick target then you are reducing the "variance" in your method. By reducing the variance, you increase the probability of repeatability. However, a profit target is not just dependent on your entry but also the volatility. As such, simple fixed variances may not work when markets change.
In general though, it is not just about the profit you make but about the totality of what you are able to produce as a result of your training and also being able to refine the parts that may not work. As you can imagine, the whole endeavor is a huge amount of work that easily becomes too much for most lone traders. Sometimes third party products can reduce the burden to build but these solutions have their own costs and often do not fully address the specific needs of the individual trader.
If we were to try to find the predictive factors for trader success, it might look something like 55% starting capital, 26% generalized trading skills and aptitude, 17% specific trading edge, and 2% luck.
That is certainly part of it, but there are many other reasons.
You'd be amazed how many times when paper trading you'll take a trade, it will lose, and you'll tell yourself "oh I would not have taken that trade because of XXXX" - some outside reason that all of a sudden becomes a rule for you to follow.
An example: Once an S&P put option seller, when confronted with the fact that his approach would have bankrupted him in 2008, said "well of course I would not have been selling options at that time. It was obvious the market was going down." Really?
I could give many other reasons why paper trading is misleading/inaccurate. So be VERY careful if you actually do it.
I'm in a very similar position , what i would suggest is that you find a job that you can trade from maybe 1-2 hours a day maybe the open/close and go from there. Get the routine down know the markets and once you have 2+ years of income saved up then look at it. Maybe start taking live trades in 6 months on a 5k account or something small to get your feet wet and that will let you get in the groove of things and not have to worry about feeding your family off this account.
