Paper vs Real Trading?

Hey guys,

Just a quick question I have been paper trading to scalp the market every day and I can seem to get my 6-8 pips a day after the spread. I have been trying to take it seriously as i can, but I wanted to know how much does your discipline/mentality change after you put in real cash?

Cheers
Vik

Demo trading is good to learn how the market behaves but you learn a lot about yourself when you put on real money.
At the moment you say you get 6-8 pips per day.I dont know what your stop is but if you put on a trade and it goes 3-4 pips against you demoing before turning and hitting your profit you think nothing of it.
With real money it gets to 4 pips down and you think youve blown it.Then its 5 pips up and everything is rosey.Next minute its 3 pips down and your screaming up up up.You look again and its 4 pips up and blood pressure drops to normal.Then your connection goes down and when you get back on line your stopped out.
Today I had a trade on the DOW.I looked at dinner time when I came back from work and I was 100 ticks up.I put in a stop as I had to go back to work.When I came home price had just gone through my stop by 10 ticks then dropped 350.I made money today but I feel like I have lost 350 points.
If you feel confident your system is good then trade with real money.
Start very small for a few weeks until you are sure your system works in real time as trades may not go through at the same price as on your chart.
If you still feel confident put in your account enough money so that when you put on a trade risking 2% of your account it means something to you if your trade loses.Then if you have a few loses reduce the amount so you feel comfortable and see if you can get back to winning ways

Thanks so much steve

Vik,

http://www.forexfactory.com/showthread.php?t=3691

Read this You'll find it helps alot. Also Mark doulgas Van K Tharp and Brett Steenbarger write brillantly on the psychological aspects of trading.

Before I went live I thought all market psychology was BS but it is hard to deal with uncertainty in any area of life and markets are no different.

Every loss and win is drawn out in real trading - you cannot skim over months of data ike in paper trading - it comes out one tick at a time and like steve says every run against your position causes angst and every rise joy - at first anyway.

In my experience absolute faith in your system is crucial.


Good luck

Trade with a amount you can loose.

And realize that predicting market is just a part of the game.
Money management or your phycological strength actually matters more

Sadly there is a big difference, mainly you can't play the cancel the trade after the effect as you wouldn't of made that mistake with real money

5-8pips per day ?? you know you can have a 40pip loss in seconds, so you'll stand still as you'll win say 5 days then lose 1 day and blow the 5 up ='s a zero sum game.

Keep demoing until you can get in and out and make 20-30pips per trade, your never going to want to lose more than 30pips and the hard part to make money you've got to profit min 60% of the time, but to make good money think 80%+ TRICKY!!

ok, its very confusing when you first settle in and start to learn a whole new language, culture and rules and then you add your own money into the mix.

LETS MAKE IT A WHOLE LOT EASIER --- come over to my thread where newbs a month ago are now pulling in an easy 100 pips a day, and where my average is 350 a day --- nothing commercial and weve got two threads running, so there is constant teaching, and constant discussion.

just look for the threads that start with MP and youll find us in the rookie section.

in a few weeks, youll forget you ever asked this question and smile at your hard won first few pips.

enjoy and trade well

mp