I agree with Mike at some point you need to expose yourself to real risk in order to develop as a trader. IMO, simulation is an important step in trader development. I speak first hand through experience. The need for simulation was one of several reasons why I initially developed NinjaTrader back in 2003. Simulation played an important role in taking me from “losing trader” to “breakeven trader” where I generated enough profits to cover my trading expenses.
Just my two cents…
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Easily solved: if you open an account somewhere like Oanda where you can deal in "lots" from $1 upward, in multiples of $1, you can trade spot forex with $1,000. You should keep your position-sizes very small, so that on each trade you'll lose no more then $10 if the trade goes against you and you're stopped out. This will give you some trading experience with real money. $1,000 isn't so much to pay for some realistic, live, trading education.
You're right that it's none, and the people telling you that it's 100% are also right.
That's because you're all using the expression "risk of ruin" with two different meanings.
You're using it to mean something like "risk of messing up your life by becoming bankrupt", which clearly doesn't apply, here, because you're "investing" only the $1,000 you've already decided you can afford to lose in the process, in exchange for some realistic education/practice; others are using it in the widely accepted technical sense of meaning "chances of losing your entire account or almost all of it."
Good luck - you really are going to need a lot, not to lose this initial $1,000.
Last edited by Tymbeline; July 30th, 2015 at 08:23 AM.
I spent some time trading at OANDA and made some very decent gains there, but due to several reasons trading forex held me back from becoming a better trader.
The position sizing is great with O, but ultimately equities or commodities futures offer better R-multiples once you start using realistic stops. I found that there was a lot more noise in forex than equities and you either would be stopped out frequently or need to use very wide stops.
There are other reasons why I feel it held me back, and perhaps others won't experience this the same way, but I find that when using something like CANSLIM correctly, it is much easier, more relaxing, and profitable than trying to trade forex either long- or short-term.
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This is the correct and obvious answer. It is still real money and real fills, but smaller leverage. So if he loses money it will take much longer to go to zero, but he still can practice position sizing.... And if he makes money, he can actually buy an icecream with the profits...
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Firstly, trade on sim. If you cant make money consistently on sim, you definately wont make money live. The difference lies in psychology, because in live trading the pressure is much more (fear of loss). But if you are profitable on sim, that shows your strategy actually works. I'm going to disagree with most traders here and say $1k might be enough if you scalp something like treasury bonds, with a 1 lot. It doesnt move too much, and your stops will be around 3-4 ticks max. which is a bit over $45-$60 per trade. That gives you around 17 losses in a row before you go broke. If you chose to do this, check out no bs day trading by john grady as he talks about scapling the treasuries using order flow and volume profile. Otherwise, trade forex with micro-lots.
Understanding yourself is just as important as understanding markets.
Let me blunt with you. Nobody was being negative for the sake of being negative. They were not being childish or poking fun at you. They were trying to help you from losing money. They are speaking from experience and you are blatantly ignoring it. I have posted before that I didn't believe in the difference between sim and cash, but the market made me a believer. If you think people who are trying to help you on futures.io (formerly BMT) are harsh, then you are not going to like getting kicked in the balls repeatedly by the market. The market doesn't grade on a curve, it is even worse than pass fail after commissions and fees, as you pay these win or lose. I was a fantastic trader on sim, but my first week trading CL I lost $1000 like it was nothing. That is your entire account. I thought I knew better than everyone else and only read stuff that supported my beliefs and ignored stuff that didn't. I didn't listen that CL isn't for beginners, my stops were too tight, my method was laughable, etc, etc. I WAS WRONG. The fact of the matter is that most of the resources available to retail traders are out of date, predatory, or just plain bullshit.
Now that being said I hope you heed the advice given to you in this thread by others. I really sincerely hope that everyone that posts on futures.io (formerly BMT) finds success in their trading journey. I don't want you to blow up your account. If you are reading this you are sitting in front of a great resource. Use it. Search through and read old threads, watch webinars, ask questions, and think critically about whatever you find. Once you have sufficient capital I wish you luck.
market understanding x you = results
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If one jumps into something or other in order to "learn how to trade", he will most likely learn instead that he has chosen the wrong path to learning how to trade. Even if he does so only with money he can "afford to lose", he will most likely do just that: lose it.
The following exchange may be of interest:
I'm noticing a possible pattern concerning my own (virtual) trading: for various reasons (either they were too risky, or not the right time of day, or for some other reason), I've passed on a number of potential entries that would have been successful. It's possible that my objections to these entries (essentially, my fears that they will not succeed) are unfounded.
Why do you say "fears that they will not succeed"? Can you elaborate?
Well, this gets right to the reason why I believe I need to have a tested trading plan. Essentially, I have no empirical reason NOT to take these trades, but I don't really have any evidence that the entries would succeed either. However, I'm beginning to suspect that I may be avoiding these trades because at some level I do not think they would succeed.
The word "fear" may be a bit strong here, but certainly I'm interpreting what I'm seeing through some kind of filter, attempting to make entries only at times when I think the chances of success are greatest. So, I guess what I'm really wondering is whether I'm allowing some emotional response (based on unknowns -- the effect of extremes in volatility on my setup) to prevent me from making entries I otherwise probably would have made.
We want to be intuitive. But unless one is exceptional, there are no shortcuts to this level (and if one is not exceptional, he will find out rather quickly). So we take or don't take a trade based on what we think or feel or intuit when in fact we are acting or not acting based on some subliminal fear. In other words, we don't take a trade because we "intuit" that it won't succeed but because we are afraid that at bottom we have no idea what we're doing, we don't want to fail, we can't afford to lose, etc. The doubt and anxiety freeze us, and whatever intuitive sense we may have has been buried in the muck.
Which is why testing is so important, and the experience, which is both a companion to and a consequence of the testing. That is, it's not just the testing that bolsters confidence but the experience that one has gained by having gone through the testing in the first place, regardless of the outcome of the testing.
There are those who believe that if one is not trading intuitively, he isn't trading. This is unrealistic. Perhaps at some point one will "get it". Or perhaps he never will. Does that preclude him from trading? Not necessarily. If he can develop a system that he trusts, he will put himself in the position of trusting his system rather than his intuition. Of course, since he developed the system, he will in a sense be trusting himself in either case (this does not apply if one uses somebody else's system). However, trusting the system (or strategy or whatever one wants to call it) is not quite so fuzzy as trusting one's intuitive sense. The system is also more easily fixed.
When you reach those "inflection points" where you must decide whether to pull the trigger or not, based either on your system or your intuition, put your thoughts into words. Be your own coach and explain to yourself, out loud, just what it is that's going through your head -- and what you're feeling -- at the moment you have to make that decision. Get a digital voice recorder rather than try to write all this down, then review your explanation/analysis/rationalization at the end of the day when you aren't on the spot and can be more objective. Use your charting program's replay function at the same time you play your recording. At the very least, this exercise may help you clarify and separate what's going on with you intuitively and what's going on with regard to your perception of your system, if and when you put one together.
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I'm new to this group but not new to stock purchasing. What I find funny is for years I did exactly what BM has advised (well not exactly) as a young man I read "A Random Walk Down Wall Street" took it to heart and invested accordingly. I purchased ETF's and blue chips investing 5-10k per month with a discount broker. It's worked out great and I've compounded my money. I recently thought I would dabble in day trading with discretionary money. I'm great with charts and computers and I considered this as something I could learn by sim trading the ES mini. I now realize as was said in these posts I'm a victim of my own Hubris.
After reading these post's I'm going to step back. I've purchased both books for my kindle and I'm going to read them pour through this site and consider what I want to do. Honestly if I'm just gonna blow my money I'd rather blow it on hookers and Vegas.
“No one ever went broke underestimating the intelligence of the American public.” paraphrase Mencken
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