Hello traders, I just wanted to get your perspectives on something that has been bothering me for some time. My dad trades equities, but when he trades, he also trades in the demo account along with the live account. I really feel that there is no good reason for this behavior. Sometimes when I ask him how he did for the day, he will tell me the results from the demo...and what do you know, when i ask him what his REAL account is doing, it does not reflect the results in demo or he will say "I got trapped." And btw he has "long only syndrome" as well and almost always has the Active Trader tab open in TOS which shows how much he is up or down and also how much he will be making at X price or losing at X price which leads me to believe that he is TOO focused on the RESULTS($$) which will most likely cloud his decision making and thinking.
One thing he has improved on somewhat, is actually considering stops. Before, he would never put stops in the market. However, there is something strange about TOS(TD Ameritrade)....if he is Long 100 shares of AAPL, he is not able to put a 100 share Limit sell at a profit target and 100 sell stop below his entry. The platform rejects both. It is either one or the other so I suggested ONLY put the hard stop and have a mental target but I am not sure if he is going to consider this approach. Are other equity brokers like this as well?
What can I do or say [especially having both sim & live account open during live hours and inputting orders in both]? I feel that he can be pretty decent if he breaks these "retail" habits. But hey what do I know? I never had any live trading experience although I will start live this summer. Happy trading
This is actually pretty common (to have both sim and live up at the same time). It's pretty clear from your post that your dad doesn't want to accept losses and lives and dies based on whether his equity curve is up or down for the day. The only way to break that habit is to make a conscious decision to do so. Typically, most traders will only do this after they have endured a lot of pain. It is natural human psychology to want to make $X a day and be willing (at least unconciously) to risk everything to do so. Breaking that habit isn't done easily for most people unless they are really introspective - and even then.
When I started trading I received all sorts of risk management advice from a mentor who was a successful trader. I still didn't heed his warnings. Does that tell you how difficult this is for most people? Perhaps when your dad has blown out an account or two and you are appropriately managing your risk with a live account he will take heed of your advice.
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SIM is good for learning the platform and practicing entering orders - like above. If he is ready to trade then he should be willing to share his trades for your review. SIM trades do not count; only the actual ones taken or avoided.
Is your father new to live trading? Maybe it would be better to take the money out of the live account and keep
the papermoney account for a while. i.e. just sim and practicing the stop placements/adjustments and adherence.
The sim TOS platform is very good with all the stats and features like the live one which could be helpful.
No he is not completely new, he started actively day trading like two years ago? It is not like his equity curve is straight down but he has less than he started with. It's only until recently that I have introduced risk management and proper trading psychology to him. He is developing slowly but surely..bad habits are hard to correct.
Also for clarification, he does have profitable trades in live account. Its just that the days where he doesn't do as well in live but does well in demo...he'll mention the demo account results to me first as if it were a trade he made in his live account. That is why I said he could be pretty decent if he gets rid of his "retail" habits in my original post. A lot of times I will ask him "How did you do in your REAL account?"
I see. Not sure what to say then as I hadn't done as much day trading on stocks. I've noticed stocks behavior may be more forgiving than commodities futures intraday when going long so may be harder psychologically to place a stop. Maybe check out other journals that daytrade equities? Every other new journal seems to be daytrading Crude futures.
Is your Dad demoing because he is reluctant to commit fully to his trading strategy?
If so, it might be because he lacks confidence in his system or in himself to trade live all the time.
I only consider myself to be a beginner at this (been doing it just over a year) but it's apparent that if a system doesn't work (for whatever reason) you're not going to figure that out by trading bits here on demo and bits there on live.
It's one thing to know a good system, its a whole different matter to be able to physically trade that system well...
I think trading needs to be done full on, figure out what's not working (your system, your money management or your psychology) and fix it, no one can figure that out for your Dad, he has to do it himself or experience won't be gained and lessons won't be learned...
It's really not easy...and from my experience so far, it never is.