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Sim Trading vs. Cash Trading
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Sim Trading vs. Cash Trading

  #11 (permalink)
Trading Apprentice
Futures Experience: Advanced
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Sim vs Live account is a hard learning step.
After losing 21000 on live account you just can't trade as sim no more.
you realize that you are now watching the market, just calling trades you're never in...just to make sure you still know how to trade but...
fear of losing more paralyze you. You end up not being able to push the button no more.
You build confidence back slowly with 4 tick scalps.
You fell that the fear you've never felt trading sim is subconscious. You won't stop your career process until you constantly make money each day ...make a good living trading.
Fear is a step every trader go through.
A step in a trader's career that comes after sim trading and set apart losers from traders so step in slowly and be rich someday ///"NEVER GIVE UP"///

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  #12 (permalink)
Just starting out...
Futures Experience: Beginner
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I have been trading in SIM since March but my SIM performance went up dramatically when I removed all of the indicators and started watching price with candlesticks, support/resistance, trend lines.Cash trading is a term used to describe a speculator that only trades with the cash on hand and does not use any margin.Trading Simulator's are an easy way to begin trading market's without the risk of losing your hard earned capital.

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  #13 (permalink)
Just starting out...
Futures Experience: Beginner
Platform: Metatrader
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Posts: 1 since May 2010
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I Trade Sim offcourse its helpful. There are some conditions i trade with sim. When im in confusion of my entry when your system is ready to give you the signal. I would be entering the Sim. That is how im using it now.. Before i used to practice the platform using Sim.

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  #14 (permalink)
Elite Member
Futures Experience: Intermediate
Platform: NinjaTrader, Metastock
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Trading System on Sim

Dear all

Interesting read. I have been using the sim account since 2 months to develop and test a trading idea that I have programmed (only entries) in simulation mode.

The system works on minute bars in the DAX and ES and since the system trades
infrequent, I desided that I would want 100 trades plotted at a minimum to evaluate the idea. 25000 minute bars further and the 100th trade has passed yesterday and I believe this could potentially be something to use in real trading.

I was wondering though if anyone ever used the same approach and if the sim mode is reflective enough to simulate real marker circomstances.

Appreciate your feedback.


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  #15 (permalink)
 R.I.P. 1960-2010 
Futures Experience: Advanced
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Favorite Futures: CL & 6e, looking at ES, ZB and AU again.
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leduc View Post
I was wondering though if anyone ever used the same approach and if the sim mode is reflective enough to simulate real marker circomstances.

This quote from Sharky sums it up nicely.

sharky View Post
you have to force yourself to think of the sim money as real cash,i do this buy relaxing and telling myself your not trading sim its real money man so be responsible and follow your rules,and i trade and add the emotion in on purpose to make my mind think its real money and this seems to help.but even if you cant do that just get really good at sim trading i mean so good that you can do it with one eye open and then everything should be ok but its easier if you just pick one market and master it before you move to another. im still trading the same thing everyday and im scared to try another market because ive invested so much time and focus on the zn that i dont want to go thru the nitemare of learning another market...sam/sharky

I also suggest reading Cunparis' Thread.

It is a method I have recently adopted in my quest to be a Master Trader.

I think that SIM is different than real, but it should not be if you have really started on the path to mastering trading. @BigMike and I had this discussion some weeks back in the Skype room and he suggested that you sit someone down in front of a computer and have it randomly decide if the trade is real $$$ or SIM without the traders knowledge.

Think it is a wonderful idea. Not that easy and there would have to be a loss limit in such a contest. Hope the winners would cover the losses of the losers.

The point is if SIM is that much different from real then your trading is being marginalized by fear or greed or other emotions that need to be dispelled ASAP. This is extraordinarily idealistic as within myself there are only fleeting moments when I totally enter TheZone and concentrate intently on what the Market is telling me. At these times I forget completely about the $$$ figure and only looking at the trade. When I am not at this point I look for nice targets, 20 pips, 25 pips, etc. and go flat. These trades usually result in my lamenting that I did not hold longer.

Post your results leduc?

R.I.P. Andy Zektzer (ZTR), 1960-2010.
Please visit this thread for more information.
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  #16 (permalink)
Elite Member
In the heat
Futures Experience: None
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Well I went live last May. I promptly lost about half my trading account. So went sim, but was never able to achieve ANY degree of consistency. So I went looking for the holy grail. Trade rooms, signal callers, indicators, auto name it, i looked at it. Still no luck.

That took a year.

Next thing I joined Big Mike's for the free indicators. Ended up getting rid of most of them. I am now in my third week of profitable sim trading. Say what you will about sim, i've never been consistent on sim or real money.

So my plan is this: Think of sim as REAL money. Treat it like such. Build at least a month of consistency on sim. Do it right. Obey the rules. Be honest about the trades. No "see what happens" trades.

In this way, when I go back to live money, I hope to have proven to myself I can actually be consistently profitable. I think by doing this, I will have confidence in my set ups, my ability to execute on them and my discipline to follow through.

So using sim to develop consistency, develop rules and learn how to execute is much better than using live money to learn these things.

I know when I go live again, there will be issues. But I hope to overcome them by the over whelming evidence of the profitable sim trading.

Simplicity is the ultimate sophistication, Leonardo da Vinci

Most people chose unhappiness over uncertainty, Tim Ferris
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  #17 (permalink)
Membership Revoked
British Columbia
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I did a lot of practice trading small micro accounts. Even having a few dollars in the game makes a huge difference. I would recommend trading M6E microlots. If you can make money doing that your execution will be even better on the bigs.

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  #18 (permalink)
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Springfield,Missouri, USA
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For me, the only way sim trading will work is if I put something on the line. There has to be a level of risk involved.
Make yourself accountable to someone and then put your pride on the line. Make a pact with a friend or spouse that if you fail to follow your rules, then you will have to pay some price. Make the price steep enough so that you will absolutely want to avoid paying it.
Make it something humbling. Or make it the household task that your spouse does & you would least want to do for a month. Better yet, let your accountability partner decide what you will have to do for them if you fail. But make it hurt!

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  #19 (permalink)
Elite Member
las vegas
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To me, the purpose of sim trading is to identify whether your method works in real time or not, i.e. can I identify the setup, can I place the orders quickly enough, can I make it better? I don't think it can be treated as a tool for becoming psychologically fit to trade with real money.

This is the reason for having sufficient capital and not overleveraging yourself. If you are inexperienced, IMO you should have at least $20,000 for each full contract you plan to trade. In this manner, by the time you lose half of it and you finally start to learn how to make money through live trading, then you will still be adequately capitalized. If you start out risking 2% or more of your bankroll on each trade, then as you lose more money you are likely to become more and more desperate with any semblance of discipline or strategy going out the window.

It is also important to have reasonable profit expectations. Do not expect to turn $5,000 into $50,000 in your first year. Like any new business, you will be doing better than most just to break even.

Using myself as a case study. I was trading currencies for a while but switched to cl. I traded two weeks in demo and then started live with 1 unit until I was familiar with the instrument. After about a month, I decided to switch from a 5 tick point-o chart to a 5-minute chart. With a 5-minute chart I have to use larger stops than I was accustomed to, and so I have still been trading at 1 unit. After having a good Monday, on Tuesday I started out with the worst day since I have been trading cl. I won one, lost one, and had one breakeven, and was down 3 ticks. Then I rattled off 3 losers in a row and was down 68 ticks on the day. Then I hit a nice 43 tick winner, small loser, and small winner to put myself back in the game. I was feeling pretty good at this point, then freakin rattled off another 3 losers in a row and went back down 65 ticks on the day. But I kept at it and went 5 for 8, with 2 breakevens, and was able to pull back to +8 ticks on the day (-1.4 after commissions).

In summary, I had two major set backs during the day, but because I wasn't overleveraged, I didn't have to stop trading and I was able to remain calm and pull myself out of the mess, not once, but twice. I ended Tuesday in a good place and had a good Wednesday. If I had been overleveraged, then I am positive I would have ended up having a really bad day, which most likely would have have carried into Wednesday and possibly the rest of my week. Psychologically, not being overleveraged makes all the difference in the world. If you are starting out, I would recommend getting profitable in demo first, then keep your risk at less than 1% per trade until you are profitable live. If you can't, then I would stop trading and keep saving. Trust me, you will make it a lot easier on yourself and you will have a much better experience.

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