Paper trading doesn’t feel the same as trading real money. However, it is a great way for potential investors or experienced traders who want to try new techniques and improve their trading skills in a non-stressful environment. The purpose of business writing is not to manage stress, but to focus on the rules of the business because if you learn to focus on the rules, stress won’t be a problem.
If you are a trader, it is important to remember that since trading is a zero-sum game, when you enter the financial market, you will find that the capital nature is competing with certain experts who have more skills, more knowledge, and more money. This does not mean that you cannot beat them. You can do it as long as you take the time to develop the skills that the professionals have. Without this, it is impossible for a person to be successful in life.
Practice trading is the best way to improve your trading skills because it allows you to practice without worrying about losing money. If you can’t make a profit from paper trading, there’s no way you can successfully trade with real money and the bonuses that come with it.
Paper trading with the same passion as real trading will result in a surprise: The way of thinking encountered on paper will be similar to the thinking in the money market in reality.
Taking the time to delve deeper into business psychology and philosophy through a business paper can benefit you in the long run by improving your business skills. Therefore, it is recommended that you focus on establishing your trading approach through trading papers before delving into the more complex aspects of trading psychology.
It is important not to rush the printing process as the time spent on this is a significant investment in your trading ability and should not be underestimated.
Set policy as list
To begin paper trading, you should
- First, create a plan that includes establishing Trading Rules.
- Second, develop Money Management Rules.
Once you have identified these rules, you should document them as a checklist on paper.
Check if your code needs to be improved to meet your needs
Once you have set the rules you can start printing just like a real business. This includes choosing the same time, market and financial instrument and assuming you have the same account size as you planned or current when trading real money.
It is recommended that you spend more time on your business, especially in your favorite business. For example, day trading can increase your learning curve because it allows you to trade more often and gain more experience in less time. By practicing in a safe simulated trading environment, you can determine if your rules need to be adjusted to suit your trading preferences.
Keep records of the simulated market
Fill your prints and customize them however you want for real money. Use tracking systems to monitor your business’s performance over time.
Estimate your trades
Group your trades on paper where each group represents specific trading rules. Then in each of these groups, calculate:
- The profit/loss.
- The average win/loss.
- The maximum win/loss.
- The number of winning trades.
- The number of losing trades.
- The number of consecutive winning and losing trades.
Update regularly
Continuously update your business by analyzing the results until you achieve results and feel confident in your business.
Ensure that you have profitable trading strategies
Ensure that you have three profitable trading strategies in paper trading before engaging in real-money trades. For day traders, it’s crucial to spread out your trades over several days, weeks, or months to include uptrends, downtrends, and sideways trading.
Assess trading strategies in actual trading as you did in paper
Once you begin using your own funds, assign a similar worth to each trading method as you did in paper trading, and analyze the outcomes.
Consider reassessing your method
If the strategies you developed in paper trading are no longer profitable in actual money trading, stop trading and go back to paper trading.
If you are making profitable trades upon your return to paper trading, then, most likely, the problem is your psychology. And you may need additional help from a trading coach to uncover the issues that led to your psychological pressure.
If you are not profitable in paper trading upon return, you may have been lucky the first time and need to adjust your trading approach so, to adapt to different market cycles.
It’s essential to find the right paper trading approach that suits your needs before determining whether the issue lies with your trading approach or psychology.
Adapt quickly and effectively
If you have more than five consecutive trades that have resulted in losses and/or losses greater than 15%, it will be like a business cycle or the trading period has changed along with the business volatility. In this case, you need to adjust your business plan quickly and effectively to adapt to these changes.
If a significant loss occurs
If a significant loss occurs during a real money transaction, stop trading and return to the chart copy while managing the same work and time. Wait until you have created a good trading strategy before continuing with real forex trading.
Revise your rules to evaluate whether this rectifies the excessive losses experienced previously. If successful, return to paper trading to validate the adjustments made. Experiment with different time frames until the most effective one is identified.
Respect your business like a medical doctor
Business is the life or the job of a trader, a trader who makes a profit from the losses of other traders. Give trading the respect it deserves and start every trading strategy on paper first until you know what you are doing.
If it makes sense to trade with real money before measuring it on paper, it also makes sense for surgeons to go through medical school without knowing what they do to sick people. But just as a doctor learns to work on a cadaver before working on a live patient, traders need to practice on paper before entering the realm of live trading.
There is no reason why you should not be satisfied
Although paper is easier than trading with real money, if you create a profitable trade and measure it according to the procedure mentioned earlier, Then there will be no problem. . If it turns out later that you cannot make money with real money, then you better solve the problem.
Simulated trading is backtesting
Simulated trading is essentially backtesting. Many backtesting software tools today have the ability to test not only the requirements of the system, but also your desire and ability to follow the rules.
Is paper trading worthless?
Building our successful business requires dedication and work, while anything worthwhile usually requires effort. If you mistakenly believe that the economy is profitable and fast, you may be in for an unpleasant surprise. After all, if you really love doing business, practical papers will not feel taxing because every development will attract great interest.
General Tip
For new investors, be sure to use a written plan to evaluate your policy and measure its performance against the market before committing your money to the business. For business people who already have good business knowledge, it is important to be open to business literature. Also, when testing a new business model or strategy, try looking at a business document first to see if the process will work for the new business.
