Chem

I started reading stuff about trading about two months ago. Specifically algorithm trading. I've been working on building a profitable algorithm and have yet to find one that does well in back tests. So in the meantime I opened up a paper trading account and decided to play around with that. I have pretty much no experience trading with real money. I have been trading with the paper account for two weeks. The first week I didn't do so well. Made a lot of errors while I figured out how the program works. I still managed to break even at the end of the week. This week my plan was to only make realistic trades (ones that I have the capital to make with real money). I did very well this week. Way better than I expected and I ended up at the end of the week up about 25%. Some things I noticed: 1. I did much better when I set limits and then just walked away. Meaning I waited to see a trend going, jumped on it, set limits and left. Often when I came back I would see that my limit had been met and that there may have been a point where the price was going against me (enough to tempt me to close out) but because I was not actively watching it I never closed out. 2. The paper trading account doesn't seem to consider the number of available shares to buy/sell? I was trading some pretty low vol futures. And I noticed that if I put in a huge order it went through right away and at one price. I'm not sure what that is called but I know that big trades end up getting spread over a range of prices. I wouldn't be trading big amounts so I don't think this would be a big problem. 3. My wins were small (with a few exceptions) but I had a lot of them and when I lost they were big losses. One question I specifically have: One trade specifically bothers me. The price had just made a big jump up. I waited to see some down resistance after the jump. When I saw that I went short. Literally a second later the price gaped up 1% then another 1.5%. I didn't have a stop set so I'm stuck at a huge loss for the day. What do you do at that point? I just tried to ride it out and it did come back down but no where near enough. In the meantime I'm stuck holding these shares and can't make any new trades. I'm thinking I would have been better just closing out when it gaped up 2.5% and trying to make money shorting it on the way down from there.