Starting from Scratch... Literally!

[srag&birdie2 10]

You probably should have read the posts from Thales before you made the statement highlighted in bold in your reply to his post...

 

Given that Mr. Thales has made exactly one post on this thread (the one above mine, and the one I commented on) I think I did read his post before making the statement I made. So, other than demonstrating the use of a yellow highlighter, what is your point?

[sevensa 10]

Given that Mr. Thales has made exactly one post on this thread (the one above mine, and the one I commented on) I think I did read his post before making the statement I made. So, other than demonstrating the use of a yellow highlighter, what is your point?

 

I've already made my point. Read and find out who you are talking to before making wild statements. Unfortunately you seem to miss the point and/or is more interested in being argumentative. Good luck to you.

[Nick1984 10]

I am in the camp that generally finds paper trading of only marginal usefulness {/QUOTE]

 

I think it depends on how you treat paper trading. If you treat it with the utmost seriousness, record all your paper traders, tract your win/loss, commit to really learning from your mistakes, etc, then it can serve you very well. There is probably no better teacher. If you treat it as something that is just a game, don't record trades, sweep the mistakes under the rug 'cuz it is better for your ego to ignore them, etc, then it won't be of any help. Funny thing from what I've seen is that those who treat sim trading as useless because it doesn't have the money behind it are the ones who have emotional problems in real trading and burn through their accounts. They can't wait to jump into the market an trade. The hard truth is if you can't treat this as a serious business, ya won't be in business for very long.

 

Thats not necessarily true. Some people are natrally a bit more disorganised but that doesn't mean they will be bad traders. Just because you don't catalogue everything doesn't mean you're destined for failure. People work differently.

 

At the minimum you need to have a concept of what you're trading strategy will be, and that concept should be written down and tested, modified if necessary.

 

Sim trading doesn't teach you how to control the emotional side of trading. No matter how long you spend on the sim you wont know how it feels to loose your first substantial amount of cash.

 

Also if you tend to spend ages on a sim and back test a system extensively, you tend to fall into a bias of optimising your system to fit all the historical data to the extent it looses all flexibility. Trading live makes you "think or swim".

[DbPhoenix 42]

Sim trading doesn't teach you how to control the emotional side of trading. No matter how long you spend on the sim you wont know how it feels to loose [sic] your first substantial amount of cash.

 

If you have a consistently profitable trading strategy, there's no reason why there ought to be an "emotional side" in the first place. And if you can't show consistent profits in sim, you sure won't be able to do so for real.

 

Also if you tend to spend ages on a sim and back test a system extensively, you tend to fall into a bias of optimising your system to fit all the historical data to the extent it looses all flexibility. Trading live makes you "think or swim".

 

If you do it incorrectly, there's no point in doing it at all. Those who don't take it seriously will find it to be, and quite rightly, a waste of time. Trading live without having done the proper preparation can also make you "think or sink".

[srag&birdie2 10]

I've already made my point. Read and find out who you are talking to before making wild statements. Unfortunately you seem to miss the point and/or is more interested in being argumentative. Good luck to you.

 

Right .

[srag&birdie2 10]

 

Thats not necessarily true. Some people are natrally a bit more disorganised but that doesn't mean they will be bad traders. Just because you don't catalogue everything doesn't mean you're destined for failure. People work differently.

 

If you are disorganized, you aren't disciplined. If you aren't disciplined, you aren't consistent. If you aren't consistent, you aren't a good trader. You can learn to be organized, but it is effort.

 

 

Sim trading doesn't teach you how to control the emotional side of trading.

 

If you do it right, it will. Why would pro athletes practice in sim every day? No cheering crowds of fans or opponents. No athlete would be daft to step onto the playing fields without beaucoup sim. It is good this mindset doesn't qualify airline pilots!

 

If you are causual and undisciplined in your approach to sim, you won't learn the emotional side. If you are causal and undisciplined in your appraoch to live trading, you won't ever learn the emotional side, either.

[robertm 10]

 

Sim trading doesn't teach you how to control the emotional side of trading.

 

If you do it right, it will. Why would pro athletes practice in sim every day? No cheering crowds of fans or opponents. No athlete would be daft to step onto the playing fields without beaucoup sim. It is good this mindset doesn't qualify airline pilots!

 

If you are causual and undisciplined in your approach to sim, you won't learn the emotional side. If you are causal and undisciplined in your appraoch to live trading, you won't ever learn the emotional side, either.

 

Pro Athletes are a rare few with a natural talent and usually require a Coach/Mentor to keep them operating within defined rules. It's a little different to wandering down to the park and kicking a ball around each day dreaming you are <insert your national sport superstar here>. No matter how much practice some people do, they are just not cut out to be a Pro Athlete, and until they step up to play the game in the thick of the action they will never know if they can handle the stresses it implies.

 

If Sim trading helps people learn the rules of the game that's fine, but if they think they can step out of a simulator and into a real F1 car and not crash and burn, well..........

 

As for airline pilots, if they start relying on forums and books to learn how to fly we are all in trouble :rofl:, the fact they sit beside a Mentor and are told to watch & learn probably helps just a bit.....

 

(yes I stuffed up that quote code but it's close enough)

[BrianNC 10]

I've already made my point. Read and find out who you are talking to before making wild statements. Unfortunately you seem to miss the point and/or is more interested in being argumentative. Good luck to you.

 

He was just stating his opinion, and it happened to be different than Thales. I see no 'argumentative' intent to his post. He can't post an opinion if it differs from Thales? I imagine there are many on both sides of the sim argument.

[thalestrader 14]

I am in the camp that generally finds paper trading of only marginal usefulness

 

 

Funny thing from what I've seen is that those who treat sim trading as useless because it doesn't have the money behind it are the ones who have emotional problems in real trading and burn through their accounts.

 

You probably should have read the posts from Thales before you made the statement highlighted in bold in your reply to his post...

 

He was just stating his opinion, and it happened to be different than Thales. I see no 'argumentative' intent to his post. He can't post an opinion if it differs from Thales? I imagine there are many on both sides of the sim argument.

 

I really do not want to get involved in an internet skirmish. But Brian, I believe that Sevensa was perhaps taking some offense to the implication by snagbird that since I do not find paper trading to be particularly useful that I must am likely suffering from emotional problems and burn out accounts.

 

snagbird could have posted everything in his original post, and he would have been simply stating an opinion that disagreed with mine, which is wonderful and fine and it is exactly the way the world is. However, due to some defect of character, he then went on to write "[f]unny thing from what I've seen is that those who treat sim trading as useless because it doesn't have the money behind it are the ones who have emotional problems in real trading and burn through their accounts." In the context of his post, it sure seemed to me that snagglebird was taking a shot at me. That is fine with me, I'm a big boy, and I was going to simply ignore his post. Sevensa also seemed to interpret snagbird as I did, and he chose to say something about it, as is his right.

 

Of course we can all disagree, especially about something as trivial and unimportant as this, but there is no need for anyone here to resort to elitetrader.com crankiness and to append your opinion with an ad hominem argument (e.g. snagbird's "only emotional losers think paper trading is useless").

 

Funny thing, from what I have seen those who resort to ad hominem arguments to make their points are not worth paying attention to, which is why I participate here at TL and I leave ET and other forums well enough alone.

 

Best Wishes,

 

Thales

[BrianNC 10]

I really do not want to get involved in an internet skirmish. But Brian, I believe that Sevensa was perhaps taking some offense to the implication by snagbird that since I do not find paper trading to be particularly useful that I must am likely suffering from emotional problems and burn out accounts.

 

 

LOL. Missed that part.

[brownsfan019 17]

As with just about anything w/ trading, what works for 1 person may not work for another.

 

Personally I find paper trading moderately useful. It can help w/ confidence and helps work out kinks in a system.

 

But I also think since it lacks any real conviction behind it (money) it can only do so much. It has serious limitations.

 

I wouldn't suggest paper trading for 2 years (what genius suggested that?) but I also wouldn't dive right in w/ real money w/o paper trading for a little bit; if nothing else to get accustomed to the software you will be using.

[brownsfan019 17]

If you have a consistently profitable trading strategy, there's no reason why there ought to be an "emotional side" in the first place. And if you can't show consistent profits in sim, you sure won't be able to do so for real.

 

If you do it incorrectly, there's no point in doing it at all. Those who don't take it seriously will find it to be, and quite rightly, a waste of time. Trading live without having done the proper preparation can also make you "think or sink".

 

And there's no guarantee that if you can paper trade successfully that it will translate to real money profits. I'm sure there are some great paper traders out there that have trouble when real money is on the line. There's an entire level of psychology that is not present on paper trading.

 

Some can overcome that hurdle and move on to trading with real money and others get stuck and have to paper trade or give up. Some even give the illusion of actually trading when it's quite the opposite.

[BrianNC 10]

And there's no guarantee that if you can paper trade successfully that it will translate to real money profits. I'm sure there are some great paper traders out there that have trouble when real money is on the line. There's an entire level of psychology that is not present on paper trading.

 

It was night and day for me. You don't really understand the difference until you go live. At least that was the case in my experience.

[DbPhoenix 42]

And there's no guarantee that if you can paper trade successfully that it will translate to real money profits. I'm sure there are some great paper traders out there that have trouble when real money is on the line. There's an entire level of psychology that is not present on paper trading.

 

Some can overcome that hurdle and move on to trading with real money and others get stuck and have to paper trade or give up. Some even give the illusion of actually trading when it's quite the opposite.

 

However, again, if one can't simtrade successfully, it's a sure bet that he won't be able to trade successfully for real. If one is having psychological issues, trading without a consistently profitable strategy is not likely to resolve them.

 

As for giving "the illusion of actually trading when it's quite the opposite", one has to be particularly careful of those who continually challenge others to provide evidence of trading, much less trading success, while failing to provide evidence of their own.

[srag&birdie2 10]

However, due to some defect of character

 

I want to thank you very much for letting me and others know I have "some defect of character." I must say, I really appreciate that. Thank you so much!

 

In fact, I think so highly of this kindness you have offered, that I have put it under my name up above. I am so proud I can hardly sit still!!

[JBWTrader 10]

Just to add my own experience in here....

 

If you do Sim enough and real trades enough they both end up feeling the same over a number of years !! funny that...

 

Sim is good to test the strategy.....this also includes backward and forward testing which is simulation (especially forward) Sim is also good if one is discretionary but like any form of practice ones attitude to it matters...It doesnt quiet equal the real thing but like any form of training/drilling it trains the mind and body what to see/expect and how one can and should react....

 

To give an eg suppose you have been on Sim for 6 months and feel comfortable with your strategy and you exit quickly when it goes against you....then you go live and the first trade you freeze when it goes against you....did you really treat sim the same way as real money ? I would say no.. can you ? well its difficult to say and depends on the indiv..

 

You could take the approach that one has to re-look at how one approached the sim trading and ask the question how do I factor this reality into it more.....Reality gets much sharper when live and this is a factor that is often not built into Sim trading as much but should be from my persective.

 

One just hopes one has/had developed other skills along the way in the Sim training to help get one thru this difficult readjustment phase. Writing out specific skill sets when drilling is something not many people do when in sim.....so some people will see sim trading as a waste of time but to others it is not.

 

There is no right or wrong answer to this....but as Brownsfan suggests its up to the indiv to ultimately decide what works and what doesnt.

 

Best

John

[robertm 10]

I want to thank you very much for letting me and others know I have "some defect of character." I must say, I really appreciate that. Thank you so much!

 

In fact, I think so highly of this kindness you have offered, that I have put it under my name up above. I am so proud I can hardly sit still!!

 

I found the perfect emoticon for where this thread ended up

 

 

:rofl:

[Kiwi 16]

 

If you are disorganized, you aren't disciplined. If you aren't disciplined, you aren't consistent. If you aren't consistent, you aren't a good trader. You can learn to be organized, but it is effort.

 

If you do it right, it will. Why would pro athletes practice in sim every day? No cheering crowds of fans or opponents. No athlete would be daft to step onto the playing fields without beaucoup sim. It is good this mindset doesn't qualify airline pilots!

 

If you are causual and undisciplined in your approach to sim, you won't learn the emotional side. If you are causal and undisciplined in your appraoch to live trading, you won't ever learn the emotional side, either.

 

 

Taking Thales point above into account, Snag, please don't take this as an attack on your or your intelligence. We form different opinions based on our experience and also the deletions and distortions our brains apply along the way.

 

So (although you personally are right) one of the opinions above is IM(H:))O, wrong. I'm not saying that the rest of it is right, just dissecting one point.

 

It mixes different things up - "If you are disorganized, you aren't disciplined." The confusion here is that organization and discipline are all that similar. They are related in the sense that we think of organized people as being disciplined but not in this context. I am very organized. I am also very disciplined about some things.

 

I am a very organized trader. But I am not a disciplined trader in the face of risk and emotional distortions that result. Hence, although I can read the markets better than I can systematize them, my lack of really good discipline under monetary risk means that I am probably better of systematizing my ideas and auto-executing them.

 

Similarly, my friend lives in a messy house and is bloody disorganized. He doesn't have a written trading plan and he turns up at the trading desk when he feels like it. He leaves on the same basis. He changes styles without "proper" research. But he is very disciplined under monetary risk in the sense that Mark Douglas means (operating without fear or greed). His breathing rate goes up etc but he doesn't let fear or greed change his approach - he does the same thing he'd do on paper or with twice the risk. He is very disciplined and as a result he is consistently profitable. But he is also totally xxxxing disorganized.

 

If you see what I mean?

Edited November 2, 2009 by Kiwi

[Nick1984 10]

If you have a consistently profitable trading strategy, there's no reason why there ought to be an "emotional side" in the first place. And if you can't show consistent profits in sim, you sure won't be able to do so for real.

 

 

 

If you do it incorrectly, there's no point in doing it at all. Those who don't take it seriously will find it to be, and quite rightly, a waste of time. Trading live without having done the proper preparation can also make you "think or sink".

 

I don't know where you think being unorganised automatically makes you lack discipline. If i choose to live life in an unorganised manner doesnt mean I can't be disciplined.

I don't have a structure to how I eat my meals each day, however I'm disciplined enough to eat healthy when it strikes me.

 

Im not organised at all and yet I've been trading for a number of years now and I"m doing very well at it.

[DbPhoenix 42]

If you have a consistently profitable trading strategy, there's no reason why there ought to be an "emotional side" in the first place. And if you can't show consistent profits in sim, you sure won't be able to do so for real.

 

If you do it incorrectly, there's no point in doing it at all. Those who don't take it seriously will find it to be, and quite rightly, a waste of time. Trading live without having done the proper preparation can also make you "think or sink".

 

I don't know where you think being unorganised automatically makes you lack discipline. If i choose to live life in an unorganised manner doesnt mean I can't be disciplined.

 

I don't have a structure to how I eat my meals each day, however I'm disciplined enough to eat healthy when it strikes me.

 

Im not organised at all and yet I've been trading for a number of years now and I"m doing very well at it.

 

Where did I say anything about organization and discipline?

[Nick1984 10]

Was a misquote sorry Db.

 

Was going to quote Srag

[zdo 20]

If you have a consistently profitable trading strategy, there's no reason why there ought to be an "emotional side"

From a reasoning point of view, this is so correct. From a real people point of view, it is pure BS.

Take a sample of a hundred traders, give them a verified edge. 2-3 will shine. Another 20 will turn reasonable profits. And the other 77 will blow up, wilt, rot, start and stop, etc. - i.e. fail. Heck, test it with your own edge db and you'll see..

 

I’ve experienced this first hand when working to recruit and build a cadre of money managers. These stats also hold up pretty well with what ultimately happened with the Turtles – and they even had great, accessible models and adequate coaching. (and fwiw, Dennis’ ‘edge’ still tested out well during their run) Anyways, the ‘reasons’ this statistic bears out are ultimately the stuff of the ‘emotional side’ – whether it “ought to be” or not

 

db, Your personal experience may not bear this out, but imo in this specific area you sell false expectations. You been getting away with polling and reporting about jesus’s world like that’s typical (instead of what his disciples were left with) way too long…

 

Whether you are aware of it or not, every time you post a version of the above herein you are basically promulgating grail seeking – and that’s ok as long as we all acknowledge it. In the archetype and in trading’s play with it, the ‘grail seeking’ story line is varied, expanded, amplified, drawn out, very detailed. Finding the edge is 'where it’s at'. Everything after is basically 'happily ever after'. But that’s not really so in the archetype (and also in trading’s play with it) and in the not so published or detailed or sufficiently varied stories of what happens after the grail is located. Yet, (the vast benefits of finding the ‘grail’ / edge notwithstanding) the after is every bit as important as the seeking part – again, even if it does not carry all the various volumes of content across time of the excitatory drythic mamas that the seeking parts do… ie Even if finding the edge / grail does heal / release one, and allow the death/end of much and bring new beginnings - it does not remove all the reaction patterns established by previous traumas and inner ‘decisions’ about them…

 

2-3 will gain from what I’m saying…

Edited November 3, 2009 by zdo

[DbPhoenix 42]

From a reasoning point of view, this is so correct. From a real people point of view, it is pure BS.

 

If you like

 

..........

[srag&birdie2 10]

Taking Thales point above into account, Snag, please don't take this as an attack on your or your intelligence.

.

 

You can attack my intelligence, if you like. It's OK with me.

 

 

I am a very organized trader. But I am not a disciplined trader in the face of risk and emotional distortions that result. Hence, although I can read the markets better than I can systematize them, my lack of really good discipline under monetary risk means that I am probably better of systematizing my ideas and auto-executing them.

.

 

I would bet that you have not been organized or disciplined in addressing the emotional side of trading - You refer to Mark Douglas and this is one of his main points - it's not enough to spend all or most of your time on the technical side; as much and maybe more is needed here. If this be true, then I would say your effort has fallen short of a well-organized and discplined approach to trading and could be improved with practice.

 

Similarly, my friend lives in a messy house and is bloody disorganized. He doesn't have a written trading plan and he turns up at the trading desk when he feels like it. He leaves on the same basis. He changes styles without "proper" research. But he is very disciplined under monetary risk in the sense that Mark Douglas means (operating without fear or greed). His breathing rate goes up etc but he doesn't let fear or greed change his approach - he does the same thing he'd do on paper or with twice the risk. He is very disciplined and as a result he is consistently profitable. But he is also totally xxxxing disorganized.

 

If you see what I mean?

 

To me, finding examples that break the rule doesn't really prove the point. Frankly, I think it more of a 'trick' the ego plays to avoid what it doesn't want to do. Take the hard task of quitting cigarrettes as example. Here's the kind of excuse the ego gives: Pablo Picasso smoked 40 nails a day and lived into his 90s, so I should be able to ignore health risks, too. Bullocks.

 

Your friend may appear consistent, but how much better of a trader would he be if really disciplined? Discipline is very hard work. Few want to do it. We make up all kinds of stories to avoid the work and feel good about it. Some person said above that athletes have natural abilities and this is why most aren't champs in sport. I'm sure that makes the ego feel good, but, sorry, not true. Hard work, mate. Little more. Practice and more practice - never ending practice (simulation) with the committment that no matter what, they will strive to be better than yesterday. Talent has little to do with that.

 

Cheers to your thoughtful response

[hedonQ 10]

I can't speak for anybody but myself. If can move back in time this is what I would do:

 

The greatest challenge is the path you choose to follow. I tried scalping, news trading,

technical indicators, candle stick patterns and price action. The greatest waste of

time were indicators. I settled on PA, I do ok.

You find your own true calling, research it and see if is good for "you". Stick to it, perfect it.

 

You need to know what it takes to succeed in this business.

Ask yourself, what is it that successful traders do to succeed? Make a list

and do it. (Read SMB capital blog, find out what they do)

Trading might be glorified, and cool to talk about and calling yourself a trader.

But it will take lot of grid and thick skin to get to a place where most people

will never get.

 

Books:

Don't buy any books about "How to make million dollars in 3 weeks" or "Secret Sauce in FX markets".

Don't buy any trading system.

I read lot of books on trading, the majority are informative but they will not teach you

how to make money. They only make money to those who write them.

Trading forums seem to be very efficient aiding in learning curve. Try the Wyckoff Forum.

Buy books dealing with psychology. I found Brett Steenbarger useful.

 

 

Sim trading:

I'd say what's important with sim is to "experience" the price action that tests your methodology.

If trading real account from get-go, even small one, you might not pull the trigger when

money is on the line. You will not "see" what works and what does not. You will not

make adjustments. You should keep sim trading until consistency emerges.

It might be that you focus on the methodology first .... than the rest.

 

 

Being a trader is a privilege. A profession that can take you from rags to riches.

 

 

Good Luck.