PAPER TRADING
(see below)
You don't make money,
but then you don't lose any either. Do lots of it. |
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Trading the Stock Market training programs available
here.
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So
why paper trade? Well, it beats losing real money and your trading
coach wants you to do a lot of it. You paper trade to learn and
to develop good trading habits. You learn how to read your
charts, how to read the markets, how to find patterns, what to avoid,
what to look for...and most importantly, you learn to trust your
judgment and the chart patterns. Get a record of
accomplishment going in your paper trading then do the real
thing. You will sense when you're ready.
What
is the difference between 'Forward' and 'Backward' trading? In Forward
trading, you find a stock, decide to trade it today in real time at
the right edge of the chart and must wait, as in a real trade, for the
outcome in the next few days. In Backward trading,
you are working in the past part of the chart, hiding the future, but
making buy/sell decisions as if the day you are looking at, at the
right edge, is today (the future part of the chart is covered or unseen).
The benefit is that you have instant knowledge if you called it right
or wrong. You can do hundreds of these on any one chart as you
look for reversal points, resistance or support levels and the
longer-term reversal or continuation patterns. You will really
benefit from backward trading.
Click
here to download this paper trading tool from cboe.com
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When you use a cleaning product
for the first time they tell you to test
it on a hidden
spot in case it messes up the color.
Paper trading is trading in that hidden spot.
If you
don't practice and see what
you've done right or wrong...
how do you intend
to improve?
Nothing
beats learning by real trading, but paper
trade your brains out.
The object is not
to see how much you can make, the object is for you
to
practice chart reading, learn your trading platform, learn how to
enter orders, etc. The object is to learn.
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This is what
you should see in your notes:
-
What
specifically
did you see in the
chart's indicators? chart
checklist
- How is the sector doing? chart
checklist
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What are
the broad market conditions? chart
checklist
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Any other research you did that pushed you to
act?
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What
off-chart events were you reacting to, if any?
off-chart checklist
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Where
or how did you find this stock?
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Note, if there is a negative sign or two that you observed, you need to make note of that as well.
This is critically important when you review your trades
...it
is what will help identify what is working for you and
what is not. In
effect, it is the only way you have to improve as a trader, by
eliminating what does not work and continuing on with what does.
Don't trust your memory, write it down.
How will you be able to tell what went wrong with the trade
if you don't make note of the observable facts?
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Recommend this
site to a friend
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