Paper Trading Notes

Paper Trade To Achieve Success In Your Trading

Posted by Ronald Lee

Trading can be very rewarding and that is the very reason that attracts many who try their luck to find their pot of gold. When you trade in the financial market, you will be competing against many skilled professional traders who have more skill and experience.

To survive in the markets, you need to equip yourself with the necessary skills to enter the markets, if not it will be very hard for you to succeed in trading.

Paper-trading is the only way to develop your trading skills; it allows you to practice without the pressure of competing against others. If you cannot make money in paper-trading, then you will not be profitable trading with real money.

Many said that paper-trading is useless because you will not able to have the psychological emotions that are experienced when trading with real money.

Surprisingly, you may find that paper-trading can create a very similar emotional roller coaster as trading with real money, if only your approach to paper-trading is with the same dedication as the same approach trading with real money.

The deeper psychological and emotional aspects will come in later, after you have developed your trading skills. It is better to sharpen your trading skill first, and then go on to develop your trading psychology.

Those who are impatient with their paper-trading are allowing themselves to be eaten alive by the professionals. Patience is the key to your trading skills and approach. This is time very well spent, as there are no shortcuts to success in trading.

Fighter pilots are required to fly and combat successful in a flight simulation before they are permitted to take an F18 fighter jet for spin. Any mistakes can the loss of lives and money. Paper-trading is the same as a flight simulator; make sure you know how to trade properly before you put your hard-earned money to trade.

Practice until you paper trading account is profitable. Analyze your trading results and make adjustments when necessary until you feel good about your trading. Constantly reevaluate your approach.

If you are already trading with real money and are not profitable trading with, stop trading and go back to paper-trading again. If you can be again profitable paper-trading, then chances are the problem is your psychology and you may need some additional adjustments to uncover your psychological conflicts.

But if are losing money in your paper-trading this time, then you may have just been lucky the first time when you paper-traded and did not paper-trade long enough to experience it.

Your trading approach needs to be adjusted. Until you have a proven trading approach to achieve consistent profit, then you will know that your problem lies in your trading approach or if your problem is merely psychological.

“The idea of perfect closes your mind to new standards.. When you drive hard toward one ideal, you miss opportunities and paths, not to mention hurting your confidence. Believe in your potential and then go out and explore it; don’t limit it.” - John Eliot, Ph.D., Reverse Psychology for Success