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Is paper trading good or bad?
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Is paper trading good or bad?

  #21 (permalink)
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This conversation is always so diverse and so interesting. I am retired Army. I can't imagine taking soldiers to war without training first. Soldiers must learn their craft in training before they can have any hope of executing their craft in war. There's just no other way around it. The emotions aren't the same in a training environment versus war environment for sure. However, that's why training is so important. Build the skills to the point that they become part of a soldier's character so to speak. That way there is a higher degree of probability they will be able to call upon those skills when emotions are high. Same thing with pilots, firemen, police officers, and many other professions. I don't see why trading is any different. I know some will say trading is different but I don't know how putting your life on the line is any different than trading.

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  #22 (permalink)
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Hey Mike...


MWinfrey View Post
This conversation is always so diverse and so interesting. I am retired Army. I can't imagine taking soldiers to war without training first. Soldiers must learn their craft in training before they can have any hope of executing their craft in war. There's just no other way around it. The emotions aren't the same in a training environment versus war environment for sure. However, that's why training is so important. Build the skills to the point that they become part of a soldier's character so to speak. That way there is a higher degree of probability they will be able to call upon those skills when emotions are high. Same thing with pilots, firemen, police officers, and many other professions. I don't see why trading is any different. I know some will say trading is different but I don't know how putting your life on the line is any different than trading.

You are making a good point here. Let me propose that the training be as close as possible to real life situations. Thus, an opinion could be formed that trading micro lots at CME or mini sized spot Forex, though "live" would be the best training. Would that fit as a reasonable response to your view.

I mean out 100 ticks on a three lot would be -$300. Would most worst case situations even with someone dumber than a box of hammers result in a draw down anywhere near that? If 3:1 was a guide on the risk side I'd think risking 10 or 12 ticks to make 30 or 40 would be ball park for most serious people. So three full risk max losers in a row results in a training cost of $100.

Some guys SIM for years. Again, IMO, a $1000 account that trades even one lot micro contracts should give the necessary feedback within 60 days or so? Train live, expedite the curve, include the SIM intangibles of emotion and execution expenses and decide how the results would fell with an additional zero or two before the decimal.

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  #23 (permalink)
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wldman View Post
You are making a good point here. Let me propose that the training be as close as possible to real life situations. Thus, an opinion could be formed that trading micro lots at CME or mini sized spot Forex, though "live" would be the best training. Would that fit as a reasonable response to your view.

I mean out 100 ticks on a three lot would be -$300. Would most worst case situations even with someone dumber than a box of hammers result in a draw down anywhere near that? If 3:1 was a guide on the risk side I'd think risking 10 or 12 ticks to make 30 or 40 would be ball park for most serious people. So three full risk max losers in a row results in a training cost of $100.

Some guys SIM for years. Again, IMO, a $1000 account that trades even one lot micro contracts should give the necessary feedback within 60 days or so? Train live, expedite the curve, include the SIM intangibles of emotion and execution expenses and decide how the results would fell with an additional zero or two before the decimal.

I need to make another point before answering...the main difference in trading versus soldiering (or those other professions I mentioned) is that trading for us guys is an individual "sport" while soldiering is both individual AND collective. Individual soldiers regardless how disciplined and well trained they are have times when their emotions take over and that's where the collection of soldiers can step in and assist the individual overcome the emotions of that episode and hopefully before something catastrophic occurs. Also, every soldier in this collective is theoretically looking out for the best interest of every other soldier as well as their own. The enemy is not.

So, I guess my response boils down to this. How do you view the market, friend or enemy? I view the market as my enemy which has no concern for my well being in any way. It could care less that I am well capitalized or not; that I'm experienced and successful or not; whether I'm sufficiently trained or not. That means to me training in a nonlethal environment comes first to the point of repeating the training until it becomes boring and part of my character, then testing my training in an environment that won't kill me if I find my training is lacking. I think your proposal of participating in the micro contracts is that kind of environment but not limited to them, depending on amount of money you can afford to risk.

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  #24 (permalink)
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MWinfrey View Post
This conversation is always so diverse and so interesting. I am retired Army. I can't imagine taking soldiers to war without training first.

As always, thank you for your service.

What happened when a solider performed very poorly during training?

With sim, there is no skin in the game. No accountability for action.

I would equate trading micro's or spot forex at 10 cents a pip more to military training than paper sim would be -- so at least when you screw up you are forced to run laps and suffer some sort of discipline or punishment for performing poorly. On sim, it's all make believe.

The point of training exercise is not to kill you when you screw up, but to at least give you incentive to not screw up.

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  #25 (permalink)
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ThatManFromTexas View Post
I've seen a lot of traders who developed and practiced their discretionary trading for months in SIM until they were consistently profitable...

But as soon as they traded live and took one losing trade... all the rules went right out the window ... consequently... they suffered terrible losses ... and promptly decided SIM trading was worthless ...

This times a thousand. Trade spot forex and risk a cup of coffee ($5) a day, it's better than paper sim. Then move to futures (micro or otherwise) after your results demonstrate it would be a good idea.

Mike

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  #26 (permalink)
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Mike beat me to it,

I was going to suggest trading mini's or micro's or trading a small portion of your capital to at least inject SOME real emotion into it.

Obviously this isn't an option for everyone, as it takes a considerable (to some) amount of capital to do this...but that speaks to another commonality among losing traders...undercapitalization and taking risks that you otherwise would not be forced to take with more capital.

"A dumb man never learns. A smart man learns from his own failure and success. But a wise man learns from the failure and success of others."
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  #27 (permalink)
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Didn't take time to read all the posts. First one has to make a distinction between games and simulations. Games are played for fun. They can be useful teaching tools but generally will have limited value.

Simulations are used in all serious professions. The first step is to change the vocabulary from "paper trading" to trading simulation.

And, yes simulated trading is extremely useful and going to be as useful as the simulation quality that you put in. Micro trading has certain limitations. The real goal of simulation is to train yourself how to act so much that you know and to learn critical mistakes such as to avoid them.

A lot of traders think that simulated trading wasn't useful because they didn't put the time and effort into it. The simulation should have objective and goals.

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  #28 (permalink)
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MWinfrey View Post

This conversation is always so diverse and so interesting. I am retired Army. I can't imagine taking soldiers to war without training first.

Good point, but it did happen,
for example in the Battle of Stalingrad (1942-43) the Soviet soldiers (pesants and blue collar) went right to the battle after arriving at the railway station and with only one gun for two soldiers.

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  #29 (permalink)
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MWinfrey View Post

How do you view the market, friend or enemy?


It used to be my enemy especially with all those revenge trades I did
-- but that sort of behaviour got me nowhere, which is why I can only say this:
if you can't beat it join it – works for me.

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