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When to Quit Paper Trading/Replay and Go Live?


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When to Quit Paper Trading/Replay and Go Live?

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  #1 (permalink)
 58LesPaul 
Hawesville, KY
 
Experience: Beginner
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When should one go live from paper trading? From previous threads I've read successful traders do not win every day, maybe every week. So should I go live when I have won every week for how long? 3 months? 6 months? Or am I day dreaming there also?

Thanks

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  #2 (permalink)
 drunkcolonel 
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honestly, the sooner you go live the better. but *cautiously*. do not rush into it. Take your time to understand the risk. I believe one should have reached a degree of confidence in back-testing their strategy/edge before moving into forward testing, so first and foremost, one must have developed confidence in their trading strategy. You may not have 100 percent certainty about when to "make the jump" to live, but nothing is 100 percent except death and taxes. Confidence is what matters, and that takes time. Thus, start small. Forward testing is where the rubber meets the road in my opinion. This is why I emphasis caution. Start small with 1 contract. Ensure you understand what can go wrong and be prepared, but again, confidence from a lot of work will let you know when to go live.

Just my 2 cents

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  #3 (permalink)
 cory 
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58LesPaul View Post
When should one go live from paper trading? From previous threads I've read successful traders do not win every day, maybe every week. So should I go live when I have won every week for how long? 3 months? 6 months? Or am I day dreaming there also?

Thanks

you can sneak in a micro emini trade occasionally to get the feel for it. Then it's just the matter of increasing the frequency until you switch over for real.

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  #4 (permalink)
 RADO 
Melbourne, Australia
 
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58LesPaul View Post
When should one go live from paper trading? From previous threads I've read successful traders do not win every day, maybe every week. So should I go live when I have won every week for how long? 3 months? 6 months? Or am I day dreaming there also?

Thanks

First find out what your profit factor is:

Profit Factor = (number wins x average win) / ( number losses x average loss)

< 1.0 - Stay on SIM
> 1.0 - Go Live
> 1.5 - Decide what color sports car you want!

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  #5 (permalink)
 AllSeeker 
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SIM trading hardly compares to live, it also gives little to no "feel of trader being real trader". I'm avid coder and I develope lot of strategies and quite a few of them have made lot of money for me in the SIM, but that never converts to real life profit.

So long story short, find a script that has lot of liquidity and at the same time requires little money to trade, and then trade it. So to answer your question, sooner the better.

Smaller the better, if you make money you move to bigger game, if you don't you leave the hunt then and there and shift to regular job.

This is just my 2c, I do think there are people who can truly make good use of SIM but unfortunately I was not one of them, in fact I think it did more damage than good in my case.

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  #6 (permalink)
TraderAnna
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58LesPaul View Post
When should one go live from paper trading? From previous threads I've read successful traders do not win every day, maybe every week. So should I go live when I have won every week for how long? 3 months? 6 months? Or am I day dreaming there also?

Thanks

It depends on the strategy. If you scalp like Gary Norden, you should not have a significant negative week. I know a guy at a prop firm and he said that on average they are profitable 10 out of 12 month.

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  #7 (permalink)
 bobwest 
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58LesPaul View Post
When should one go live from paper trading? From previous threads I've read successful traders do not win every day, maybe every week. So should I go live when I have won every week for how long? 3 months? 6 months? Or am I day dreaming there also?

Thanks

This is a hard question, and I agree with pretty much everything that has been said. Let me add a little more....

For many, sim is a trap. You think you are learning trading, but you are learning how to trade when there are no consequences for being wrong that actually matter. It's somewhat like a video game. When you first go live, you will certainly have some losses, sometimes small and sometime big, and it will totally surprise you how different this feels from simulated "losses" that don't hurt and don't make you sweat.

This is the simple reality of trading, and this dimension of how it feels when you have skin in the game, and what it does to your decision-making, has to be experienced to be believed.

But there's another side to this too. Just as an athlete will practice their game, knowing that it's only practice and that it doesn't have real-life pressures, some traders (repeat: some) can benefit from more sim. It is a place to work on the technical aspects of your game, without the penalty of sudden losses. Think about a tennis player working on their serve on practice days. So that's one way to look at how to balance these two. How it works for you will depend on you.

I would say that if you haven't traded live, you need that experience. The micro contracts, if you trade them at really small size -- at one (let me repeat, one) contract at a time -- will give you invaluable experience in the real world and won't cost you too much. Be prepared: they will almost certainly cost you something, because the real game of trading is only somewhat like the sim game, and you won't know the real game without being there.

Just be ready to have a different experience. Keep your money commitments small and be ready to learn from your mistakes. The most important thing I can tell you is to keep your losses small, and after that, to keep your emotions on as even a keel as possible, win or lose, and after that, the least important thing is the only one you can learn in sim: have a good trading method that is profitable when executed ideally. It is least important because it won't be profitable if you can't keep your head on straight when you lose, or if you let losses grow because you can't accept that you have to take them while they are small.

But it is the only thing that a sim trader generally knows about or works on.

So I guess the answer is somewhat like, "It depends."

But these are what it depends on.

Bob.

When one door closes, another opens.
-- Cervantes, Don Quixote
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  #8 (permalink)
 58LesPaul 
Hawesville, KY
 
Experience: Beginner
Platform: thinkorswim
Trading: NQ
 
Posts: 101 since Sep 2015
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Thanks everyone!

I work a regular job at the moment and hopefully will be retiring soon so after I retire will be the earliest I will start live trading. I have already traded live twice, and they were both accidents and on a phone app at that. LOL! ToS papertrade side wasn't working so I had to go to the real account side to watch the market and forgot and placed a trade, twice. Luckily I came out ahead on both but I do not want to trade real money on a phone app!

And no, I will not be using ToS/TDA, I am using Sierra Chart currently for replay and delayed quote SIM trading. I will look for another broker soon.

Thanks again!

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  #9 (permalink)
ZviTradingCoach
Eilat, Israel
 
 
Posts: 14 since Dec 2020
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Just a point to keep in mind:
Many traders go live with the intention of "OK, now it's for real, let's make as much money as we can".
This causes a pressure to increase trading size.

The initial purpose of beginning live trading should be viewed as "close as possible to simulated trading, just in the real market, and with low tuition costs". Your goal is to perform near as profitably as in sim. It is an EDUCATIONAL phase, not a MONEY MAKING phase in your development.

TRADE AS SMALL AS POSSIBLE!!!!!

Yes, just 1 contract (or a pair if your strategy calls for it). Even a single micro.
Yes, you'll be trading live for a month and making 100$... and then another. And then - great, move up to 2 contracts... and so on.

SLOWLY scale up. Usually no quicker than once a month, and only if consistently able to follow your plan live and to be profitable. ONLY AT ABOUT YOUR 3RD SCALE UP, SHOULD YOUR INTENT TURN TO MAKING MONEY and growing your trade size to make more.

You must resist the urge to trade "full size" positions live. Skill first, money next.

GOOD LUCK.

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  #10 (permalink)
lightsun47
Toronto, Canada
 
 
Posts: 181 since May 2018
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It's time to go live when you are completely confident with proof your system works as intended, BUT WITH ALSO HAVE A ROBOTIC (NO EMOTIONS) MINDSET THAT THE NEXT TRADE MAY OR MAY NOT WORK BECAUSE ALL THESE ARE JUST RANDOM PROBABILITIES.

This will help you when you have a losing trade / day.

Sent using the futures.io mobile app

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