we, all heard paper trading and
for trader it is necessary these days to be successful.
what paper Trading stands
for.....
It is trade of financial
instrument such as stocks, options and futures using their current prices as
would be buy and sell prices.
No real money is put at risk, instead Monopoly Money or Paper
Money is used, Clearly, I believe that paper trading is not only beneficial,
but is an absolute requirement of successful trading.
This is where most traders start
their trading career anyways. It allows you to make trading decisions on paper
only, so you can explore and try
Why Do I Need To Paper Trade?
To practice trade where no actual
Loss to be considered. Everyone can read about trading or take a course of
trading but until you actual open up a paper trading account with a broker and
start trading you will never learn exactly how it works.
As the old saying goes, There is no substitute for Practice. The
more experience and education you have the more profitable you will be as a
trader.
My 3 Problems With Paper Trading
I have three really big problems with paper trading in general.
First, it teaches you things that you would not necessarily do had you been
trading real hard money. Subconsciously you see it as a game instead of a
learning tool.
Due to no real money is used many student or new trader take big
exposure in reality if they want to start trading ideally they never do so.
Example: I take 100 lot of future position on paper trade, in
real trade hardly I always start 3-4 lot. so, it is like more playing Game kind
learning. Therefore, it is critical that you paper trader only trades you would
and could trade with real money.
Second, paper traders always seem to focus more on trading
profitability, instead of being Consistency of whether they are ready to
begin trading real money. Use the different broker platforms to test basic
trading setups, make necessary adjustment and master entry-exit points. Once you start
making consistent gains with a proven trading plan, then you can venture off
into the real market.
Third, Trade doesn't include
emotion as actual loss is not countable. so, feeling behind the loss comes on
paper doesn't make much sense on my mind. Even movement between TARGET or
STOP-LOSS doesn't make bigger effect on my mind as I always consider any of two
when prices reach. In reality flow of news and environment effect on mind and
emotion for trade make fear on mind.
Happy Reading
Derivativelearn
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