Stockmarket Trading, Forex, Commodities.

[Paulo1]

me too longer term am short DOW and SPX my sl is 1720 for SPX, but got a reverse position on as well, heheh u took gbp/NZD did the same with euro/nzd

This is an old pic of when I entered the GBPNZD. It dropped a lot further than in the pic. I posted it here somewhere also.

Just took 41 pips on the CHFJPY. This is a no brainer. Check it out.

Well, the fun part is that it never gets old, and the impossible part is that it never gets easy. For today, selling volatility is a must, and staying small is a must. Also, look for the futures to be wrapped around unchanged for the announcement, and watch for a price reversal or mean reversion to follow shortly. The bottom line to all this news-related nonsense is engagement. So think opportunity, and with the /ES at record highs, think lots of opportunity.

Edited September 18, 2013 by Paulo1

[Paulo1]

So just about everybody was wrong and the markets reacted accordingly with equities and bonds flying and the USD getting crushed. US yields, which had crept up in the morning to as high as 2.9% went into the announcement at 2.86% and dropped within a minute to 2.75%. During the press conference yields fell another 7bps to 2.688% where they closed for a net fall of 15.89bps and 21bps off the high. 5’s fell 18bps and 2’s down 5bps.

Stocks soared to record highs on the S&P and DOW, up 1.22% and 0.95% respectively with utilities and real estate stocks significant outperformers.

The greenback was torched across the board:

GBP +250pts

EUR +180pts

JPY +124pts

AUD +168pts

Gold +$53.77 (4.04%) to $1364.37

Oil +2.7%

Economic projections from the committee showed GDP down next year and this year and rate hikes not expected until late 2015. Bernanke was defensive in the conference repeating that he never promised any taper and that the path is still entirely conditional upon data and that the process “could” begin this year. He also repeated that the headline rate of unemployment is not necessarily the best gauge of the overall labour market and conditions there remained soft despite the falling headline rate.

Edited September 18, 2013 by Paulo1

[Paulo1]

From M Pento.

http://www.pentoport.com/mp3/MRC130918.mp3

[Firefan]

What a day in the forex, stock and equity markets. Lot's of action.

If the FEDs keep pumping money into the system I am along for the ride - looking at equity valuations we are not yet in a true bubble there, so my guess is we could see the momentum continue this fall/end year with even higher highs.

Appreciate having read the latest part of this thread. Incl. insights and ideas from Paulo.

Cheers!

[Paulo1]

What a day in the forex, stock and equity markets. Lot's of action.

If the FEDs keep pumping money into the system I am along for the ride - looking at equity valuations we are not yet in a true bubble there, so my guess is we could see the momentum continue this fall/end year with even higher highs.

Appreciate having read the latest part of this thread. Incl. insights and ideas from Paulo.

Cheers!

I agree with your thoughts, before 7.30am NZ time this morning. I would not have. Marc Faber said yrs ago , once the Fed starts QE there is no return, perhaps that's what is happening now.!!!!!!!!!!

When looking at the charts I feel that these moves higher are getting closer and closer to a trend exhaustion. Debt ceiling is the next big one, guess they will have to raise it again to continue spending.

Watching the AUDNZD sell, Been on this for a while now. short from 1.2715 Daily chart.

[Paulo1]

A close for the S&P below 1685, a close for Nasdaq below 3176, and a close for the Dow Jones below 15,300 will be a sell signal.

Silver did not give a buy signal. Those who are long should watch 1323 for Gold and 21.80 for Silver sell signals.

Crude

The sell signal continues for Crude. downside price target is 102.80, bottom again around OCT

Nat Gas .close below 3.55 will be a sell signal.

Euro

The Euro continues on a buy signal from 132.50 EUR/JPY. Looks toppy, a close below 134.50 was the sell signal . We should see 136 EUR/JPY

Australian Dollar

Keep the sell stop around 93.40 AUD/USD for the Aussie. Long from around 91 AUD/USD.

Canadian Dollar

The Canadian Dollar needs a close below 102.50 USD/CAD for a buy signal. About 30 pips away .

Have found a good platform for trading Baht. They have about 5 baht crosses, Can not get them on a demo however, and they are only on the ctrader platform. Broker from Japan. This is the Aussie branch.

http://invast.com.au/

Edited September 23, 2013 by Paulo1

[Paulo1]

Nobody in the bull camp likes a late sell-off, and nobody likes when the markets zag when they should have zigged. Betting that yesterday’s strong tape would keep the Street leaning long, the rare late sell-off seems to confirm that the buyers are tired. I feel like except for a narrow few stocks, and it is a very small and over-owned group, this market is becoming even more predictable and much more cyclical. These are all factors that don’t confirm upside continuation nor are they setting the stage for an additional upside rotation.

Nice moves in JPY and NZD .And USD news in about 3.5 hours.

Edited September 25, 2013 by Paulo1

[likewise]

Been shorting S&p500 and DOW most of this week, not with you on the rise in euro/yen though, at least not before a serious correction has taken place.

Regarding the DOW....... sit and wait for now, took the $$ already this week, next week should be very volatile....... all the best.

[Paulo1]

EURYEN is a bit funny at present. I did mention it looked toppy. Will hold till end of the month. Have taken profits and stop is in the money , so all good.

Expect to see a bounce on Gold on a close above 1362 and Silver on a close above 22.80.

As said I a previous post.

S&P/Nasdaq. Closes below following levels will lead to a sell signal. S&P below 1685, Nasdaq below 3175, and Dow below 15300, which we got yesterday Am short at 15293.35

Edited September 26, 2013 by Paulo1

[likewise]

Keep on an eye on the VIX , bit too calm, before the storm ?? with ya on the short DOW, took my profits yesterday, at the moment bit hesitant.......biased towards a stronger correction to the downside though.

Edited September 26, 2013 by likewise

[Paulo1]

Keep on an eye on the VIX , bit too calm, before the storm ?? with ya on the short DOW, took my profits yesterday, at the moment bit hesitant.......biased towards a stronger correction to the downside though.

VIX will move as we get closer to US debt ceiling negotiations. Was having a look at the charts early in relation to pass dates and interestingly at the dates USD retained pretty strong. So guess it be no different this time.

Dow moving higher at 15262 at present.

Happy to see EURJPY on the move,

USDCAD As posted . am long.

[likewise]

be patient my kiwi friend, have another good look at euro/yen S&P500, DOW, this is the beginning of a bigger correction, not talking bear market but a deeper correction is due. US is living in Billions of borrowed $$, there is low liquidity in the market at the moment, At the moment investors are/were euphoric about the non tapering, but that doesn't show a realistic view of the current economy.

Edited September 26, 2013 by likewise

[Rimbuman]

The Coming Worldwide Money Grab. Jim Sinclair

It is becoming painfully obvious for those who have eyes that central banksters have plans to confiscate our wealth with savings and retirement accounts being the prime targets of their desperate aggression.

While this is still unthinkable to some, the evidence clearly shows that central bankers already have things in motion.

Jim Sinclair in the past two weeks has probably made, in my opinion,the most important posts he has ever declared since starting his www.jsmineset.com website over twelve years ago. We the people are very fortunate to have someone like Jim who truly understands the workings of the bankster scum and has the courage to post his thinking freely for all to see.

Jim’s posts of the last two weeks in particular have spelled it out in no uncertain terms.Below I have put some of his most important quotes in italics. For the full comments you can access them at his website or on the King

World News interviews with Jim.

“A contrarian would have to come to the conclusion that there are some very frightening and serious problems being hidden from the general public. Regardless, what we have seen in the recent takedown in gold is without any doubt coordinated operation, and all of this in an effort to make the US dollar look better.”

“It is extremely important for people around the world to understand that if history has taught us one thing, it is that central planning has never, ever succeeded. This group of central planners will fail as well.They are designed to fail and they know it. buy time before a new world currency is put in place.”They are simply there to

“You must now act to exit the system.

Hi Paulo,

First of all I'd like to compliment you with this thread, it's great and very help full to read a Pro's journal like this. One can hardly anywhere find such an open and direct script from a success full trader on the web.

I also noticed your interest in precious metals and banking as in the article above so I thought you might be interested reading a short interview with a PM trader about the gold and silver market. What this man say's in this interview makes sense to me although you would not have to follow his exact words on the matter.

I also added an extra article with an other person with a similar view.

http://www.kitco.com/ind/Tekoa_Silva/2013-09-18-Gold-Trader-The-Market-Manipulation-Has-Begun-Again.html

http://www.kitco.com/ind/Conner/2013-08-13-Gold-The-Hidden-Agenda-Behind-The-Bear-Raid.html

Maybe the trade of a decade is in the make.

[likewise]

interesting articles, thanks. Someting to keep in mind.

Edited October 4, 2013 by likewise

[Paulo1]

The Coming Worldwide Money Grab. Jim Sinclair

It is becoming painfully obvious for those who have eyes that central banksters have plans to confiscate our wealth with savings and retirement accounts being the prime targets of their desperate aggression.

While this is still unthinkable to some, the evidence clearly shows that central bankers already have things in motion.

Jim Sinclair in the past two weeks has probably made, in my opinion,the most important posts he has ever declared since starting his www.jsmineset.com website over twelve years ago. We the people are very fortunate to have someone like Jim who truly understands the workings of the bankster scum and has the courage to post his thinking freely for all to see.

Jim’s posts of the last two weeks in particular have spelled it out in no uncertain terms.Below I have put some of his most important quotes in italics. For the full comments you can access them at his website or on the King

World News interviews with Jim.

“A contrarian would have to come to the conclusion that there are some very frightening and serious problems being hidden from the general public. Regardless, what we have seen in the recent takedown in gold is without any doubt coordinated operation, and all of this in an effort to make the US dollar look better.”

“It is extremely important for people around the world to understand that if history has taught us one thing, it is that central planning has never, ever succeeded. This group of central planners will fail as well.They are designed to fail and they know it. buy time before a new world currency is put in place.”They are simply there to

“You must now act to exit the system.

Hi Paulo,

First of all I'd like to compliment you with this thread, it's great and very help full to read a Pro's journal like this. One can hardly anywhere find such an open and direct script from a success full trader on the web.

I also noticed your interest in precious metals and banking as in the article above so I thought you might be interested reading a short interview with a PM trader about the gold and silver market. What this man say's in this interview makes sense to me although you would not have to follow his exact words on the matter.

I also added an extra article with an other person with a similar view.

http://www.kitco.com/ind/Tekoa_Silva/2013-09-18-Gold-Trader-The-Market-Manipulation-Has-Begun-Again.html

http://www.kitco.com/ind/Conner/2013-08-13-Gold-The-Hidden-Agenda-Behind-The-Bear-Raid.html

Maybe the trade of a decade is in the make.

Hi Rimbuman,

Thanks for your kind words.

Those articles you posted are very good and appreciated. I share the some opinion and am waiting for gold to hit the 1050 zone. Trading fulltime its difficult to keep up with quality media releases, especially in todays techno world.

VIX

The Volatility Index also reached my second target of 17.80, and continues on a buy signal - as long as there is no close below 15.80.

Biggest FX trade this week was selling the GBPJPY from 158.66 with a gain of 280 pips and a target to 154.44

[Rimbuman]

Hi,

interesting articles, thanks. Someting to keep in mind.

Thanks for your kind words.

Those articles you posted are very good and appreciated. I share the some opinion and am waiting for gold to hit the 1050 zone. Trading fulltime its difficult to keep up with quality media releases, especially in todays techno world.

Anytime, I'm happy it's appreciated.

I am not a trader, just a wannabe.

To save you time, for FX and PM www.DailyPfennig.com is a good read in general and it's free. Chuck Butler is a good man with his perception as close to reality as one wants.

Happy trading,

Rimbuman

Edited October 5, 2013 by Rimbuman

[Rimbuman]

Reason being is a micro account will teach market psychology where as a demo won't

I understand where you're coming from. Especially if it was, for example, a mini or standard account. But is there really such a huge psychological difference given the very small volumes we'd be looking at on a micro account?

Still takes some practice to work out how to use the tools too, drawing trend lines, using the Fib levels, reading canldesticks etc. I wouldn't want to go live until I am confident that I'm using the tools correctly

You will learn lot quicker being a micro account. Can open one with as little as $50.

You only need to know about 5 candle formations, Hammers, Shooting Stars, Engulfing, Doji, Morning and Evening Stars, www.candlecharts.com , Fibs, easy last swing high/low to the time-frame you are trading.Fib moves from left to right. Trendlines, many different idea's, find what fits, Demark is good, but takes some work, The key is emotional and money management, forget about the rest , it will come.

Great strait fore ward advice. This is simple no nonsense truth for all beginning and re entering traders to follow. Although I 100% agree on this I have a question.

Wouldn't this result in a bleeding account because the odds against you are higher. Besides me being my own enemy in the past "commissions and slippage" were also a high factor in account damages.

[Paulo1]

Reason being is a micro account will teach market psychology where as a demo won't

I understand where you're coming from. Especially if it was, for example, a mini or standard account. But is there really such a huge psychological difference given the very small volumes we'd be looking at on a micro account?

Still takes some practice to work out how to use the tools too, drawing trend lines, using the Fib levels, reading canldesticks etc. I wouldn't want to go live until I am confident that I'm using the tools correctly

You will learn lot quicker being a micro account. Can open one with as little as $50.

You only need to know about 5 candle formations, Hammers, Shooting Stars, Engulfing, Doji, Morning and Evening Stars, www.candlecharts.com , Fibs, easy last swing high/low to the time-frame you are trading.Fib moves from left to right. Trendlines, many different idea's, find what fits, Demark is good, but takes some work, The key is emotional and money management, forget about the rest , it will come.

Great strait fore ward advice. This is simple no nonsense truth for all beginning and re entering traders to follow. Although I 100% agree on this I have a question.

Wouldn't this result in a bleeding account because the odds against you are higher. Besides me being my own enemy in the past "commissions and slippage" were also a high factor in account damages.

Your commission's and Slippage is something you need to address with your broker. If you are unaware of the cost of your fills they can cause serious damage to your account, plus the broker will know how much they can get away with.

"Wouldn't this result in a bleeding account because the odds against you are higher?" Notsure what you mean ?

[Rimbuman]

I understand the confusion I cause with my choice of words, I didn't make these words up my self. I have picked them up reading about trading.

A bleeding trading account would be a slowly but surely shrinking trading account caused by less favorable commissions and other cost charged by the broker because you trade on a mini or micro account even when the trader is a better than average trader.

I'd agree that the word "odds" for commission, slippage and possible other cost is not a good word choice because it may sound we are talking about a game or gambling while successful trading is about trading as a business, not for gambling or entertainment.

I mindlessly used the word "odds" because an author of one of my books about trading used it, you can think of better words for this but actually I don't care how it is called. I know when you trade it is always there, when you lose in a trade it is added to the lost, when you make a profitable trade it is deducted from the profit and the smaller that amount is the better for the trader.

I'm not sure but it seems to me that the majority of traders trade online these days and checking some of these online brokers they state their commissions and slippage on their websites, I wasn't really aware that these charges are negotiable.

Edited October 6, 2013 by Rimbuman

[Rimbuman]

I understand the confusion I cause with my choice of words, I didn't make these words up my self. I have picked them up reading about trading.

A bleeding trading account would be a slowly but surely shrinking trading account caused by less favorable commissions and other cost charged by the broker because you trade on a mini or micro account even when the trader is a better than average trader.

I'd agree that the word "odds" for commission, slippage and possible other cost is not a good word choice because it may sound we are talking about a game or gambling while successful trading is about trading as a business, not for gambling or entertainment.

I mindlessly used the word "odds" because an author of one of my books about trading used it, you can think of better words for this but actually I don't care how it is called. I know when you trade it is always there, when you lose in a trade it is added to the lost, when you make a profitable trade it is deducted from the profit and the smaller that amount is the better for the trader.

I'm not sure but it seems to me that the majority of traders trade online these days and checking some of these online brokers they state their commissions and slippage on their websites, I wasn't really aware that these charges are negotiable.

I meant to say that these online brokers state their commissions and lowest "spreads" on their website and of course slippage could also work in favor of the trader. To late to edit so correct it this way.

[Paulo1]

I understand the confusion I cause with my choice of words, I didn't make these words up my self. I have picked them up reading about trading.

A bleeding trading account would be a slowly but surely shrinking trading account caused by less favorable commissions and other cost charged by the broker because you trade on a mini or micro account even when the trader is a better than average trader.

I'd agree that the word "odds" for commission, slippage and possible other cost is not a good word choice because it may sound we are talking about a game or gambling while successful trading is about trading as a business, not for gambling or entertainment.

I mindlessly used the word "odds" because an author of one of my books about trading used it, you can think of better words for this but actually I don't care how it is called. I know when you trade it is always there, when you lose in a trade it is added to the lost, when you make a profitable trade it is deducted from the profit and the smaller that amount is the better for the trader.

I'm not sure but it seems to me that the majority of traders trade online these days and checking some of these online brokers they state their commissions and slippage on their websites, I wasn't really aware that these charges are negotiable.

I meant to say that these online brokers state their commissions and lowest "spreads" on their website and of course slippage could also work in favor of the trader. To late to edit so correct it this way.

At the end of the day if slippage and commissions are the difference of being profitable or not then the trader need to address their trading methods as well.Most MT4 brokers, Saxo Bank etc are dodgy. . USA brokers are more regulated than others and are safer to trade with. FXCM is one of the more respected brokers even though they had some issues a few yrs ago.

Some tricks the brokers use. Turning of the platform at their end, but your platform is still showing data streaming. Increasing the spreads to take stops out.

Be careful of which books you read and who you listen to also, most books written are all the same, preaching the same technics for congressional trading. Making money from using their technics rarely happens. Keeping it simple is key. You have five main points in reality. The high, low, open, close and the range. Be aware of their relationship to each other and looking at the range of the open, close near the 50% retracement level of that range to determine trend and entries. You can then add volume if trading Stocks, Futures etc. Not a lot of use in FX. However the use of Tick volume on individual candles/bars can be of useful, but more for the advanced trader on 1 to 5 minute charts.

Also be aware of support and resistance zones . Understanding Fibonacci can help with this, Fib retracements and Fib extensions.

[likewise]

Indeed as paulo stated I brokers will be bbrokers but FXCM and rj OBrien are some of the better ones, you gotta hunt around and of course if one is bad trader do not blame it on the broker, seems to happen a lot lol

[Paulo1]

Trading.

Trading is a mental game. It is you versus yourself. You decide every trade. Your emotions are there at every decision.

[Rimbuman]

I understand the confusion I cause with my choice of words, I didn't make these words up my self. I have picked them up reading about trading.

A bleeding trading account would be a slowly but surely shrinking trading account caused by less favorable commissions and other cost charged by the broker because you trade on a mini or micro account even when the trader is a better than average trader.

I'd agree that the word "odds" for commission, slippage and possible other cost is not a good word choice because it may sound we are talking about a game or gambling while successful trading is about trading as a business, not for gambling or entertainment.

I mindlessly used the word "odds" because an author of one of my books about trading used it, you can think of better words for this but actually I don't care how it is called. I know when you trade it is always there, when you lose in a trade it is added to the lost, when you make a profitable trade it is deducted from the profit and the smaller that amount is the better for the trader.

I'm not sure but it seems to me that the majority of traders trade online these days and checking some of these online brokers they state their commissions and slippage on their websites, I wasn't really aware that these charges are negotiable.

I meant to say that these online brokers state their commissions and lowest "spreads" on their website and of course slippage could also work in favor of the trader. To late to edit so correct it this way.

At the end of the day if slippage and commissions are the difference of being profitable or not then the trader need to address their trading methods as well.Most MT4 brokers, Saxo Bank etc are dodgy. . USA brokers are more regulated than others and are safer to trade with. FXCM is one of the more respected brokers even though they had some issues a few yrs ago.

Some tricks the brokers use. Turning of the platform at their end, but your platform is still showing data streaming. Increasing the spreads to take stops out.

Be careful of which books you read and who you listen to also, most books written are all the same, preaching the same technics for congressional trading. Making money from using their technics rarely happens. Keeping it simple is key. You have five main points in reality. The high, low, open, close and the range. Be aware of their relationship to each other and looking at the range of the open, close near the 50% retracement level of that range to determine trend and entries. You can then add volume if trading Stocks, Futures etc. Not a lot of use in FX. However the use of Tick volume on individual candles/bars can be of useful, but more for the advanced trader on 1 to 5 minute charts.

Also be aware of support and resistance zones . Understanding Fibonacci can help with this, Fib retracements and Fib extensions.

Thanx again,

These are bits and pieces of advice that could benefit the chance of becoming a better trader.

Through the glasses of a seasoned successful trader I understand your point of view, though through the glasses of a wannabe trader who reads this thread I'd rather write " At the beginning of the day if slippage and commissions are the difference of profitable or not" because it is an obstacle for every trader but a far higher hurdle to take for a beginning or learning trader than for a successful pro.

At the end of the day the novice trader would like to be a consistent winner who can handle these commissions and slippage like a pro, grow in performance and consequently that brokers cost is not a determining factor for losing or winning anymore.

For reading books about trading it is the reader that should be careful and critical about himself or herself, not so much the book, if the reader is not sufficiently capable of separating crap from usable information the reader better let go of the idea of becoming a trader.

I have theory about a reason why so many traders don't make it, that has far as I know not been published or written about in the way I see this.

If I asked you or any one else who reads this how the world would look like if every child would have to raise and educate themselves without proper guidance like schools, tutors, teachers and parents.

The answer most likely would be in the order like " the world is far from perfect and in case like that the world would be a real mess"

This could be applied to traders because most of them are self raising turtles without guidance on their own, only few fortunate ones have been raised and taught under guidance and even less have reached their goal by them selves.

Edited October 7, 2013 by Rimbuman

[Paulo1]

I understand the confusion I cause with my choice of words, I didn't make these words up my self. I have picked them up reading about trading.

A bleeding trading account would be a slowly but surely shrinking trading account caused by less favorable commissions and other cost charged by the broker because you trade on a mini or micro account even when the trader is a better than average trader.

I'd agree that the word "odds" for commission, slippage and possible other cost is not a good word choice because it may sound we are talking about a game or gambling while successful trading is about trading as a business, not for gambling or entertainment.

I mindlessly used the word "odds" because an author of one of my books about trading used it, you can think of better words for this but actually I don't care how it is called. I know when you trade it is always there, when you lose in a trade it is added to the lost, when you make a profitable trade it is deducted from the profit and the smaller that amount is the better for the trader.

I'm not sure but it seems to me that the majority of traders trade online these days and checking some of these online brokers they state their commissions and slippage on their websites, I wasn't really aware that these charges are negotiable.

I meant to say that these online brokers state their commissions and lowest "spreads" on their website and of course slippage could also work in favor of the trader. To late to edit so correct it this way.

At the end of the day if slippage and commissions are the difference of being profitable or not then the trader need to address their trading methods as well.Most MT4 brokers, Saxo Bank etc are dodgy. . USA brokers are more regulated than others and are safer to trade with. FXCM is one of the more respected brokers even though they had some issues a few yrs ago.

Some tricks the brokers use. Turning of the platform at their end, but your platform is still showing data streaming. Increasing the spreads to take stops out.

Be careful of which books you read and who you listen to also, most books written are all the same, preaching the same technics for congressional trading. Making money from using their technics rarely happens. Keeping it simple is key. You have five main points in reality. The high, low, open, close and the range. Be aware of their relationship to each other and looking at the range of the open, close near the 50% retracement level of that range to determine trend and entries. You can then add volume if trading Stocks, Futures etc. Not a lot of use in FX. However the use of Tick volume on individual candles/bars can be of useful, but more for the advanced trader on 1 to 5 minute charts.

Also be aware of support and resistance zones . Understanding Fibonacci can help with this, Fib retracements and Fib extensions.

Thanx again,

These are bits and pieces of advice that could benefit the chance of becoming a better trader.

Through the glasses of a seasoned successful trader I understand your point of view, though through the glasses of a wannabe trader who reads this thread I'd rather write " At the beginning of the day if slippage and commissions are the difference of profitable or not" because it is an obstacle for every trader but a far higher hurdle to take for a beginning or learning trader than for a successful pro.

At the end of the day the novice trader would like to be a consistent winner who can handle these commissions and slippage like a pro, grow in performance and consequently that brokers cost is not a determining factor for losing or winning anymore.

For reading books about trading it is the reader that should be careful and critical about himself or herself, not so much the book, if the reader is not sufficiently capable of separating crap from usable information the reader better let go of the idea of becoming a trader.

I have theory about a reason why so many traders don't make it, that has far as I know not been published or written about in the way I see this.

If I asked you or any one else who reads this how the world would look like if every child would have to raise and educate themselves without proper guidance like schools, tutors, teachers and parents.

The answer most likely would be in the order like " the world is far from perfect and in case like that the world would be a real mess"

This could be applied to traders because most of them are self raising turtles without guidance on their own, only few fortunate ones have been raised and taught under guidance and even less have reached their goal by them selves.

WOW, You have put some serious thought into what's written.

[Rimbuman]

555 I guess thats the way I am and how I see stuff, but that still doesn't make me a consistent winner.

How about raising a turtle? ...........Anyone ?

[Paulo1]

We're right back to the lows of the last sell-off but this time, it just feels different. It seems to me that the bulls have lost their legs and what about if they lose the NASDAQ and Russell as well. Additionally, earnings season and the resolution of the government shut down are unlikely to be enough of an upside catalyst to reverse the momentum. Plus the strong VIX rally(which I am long), a sell-off and way too many complacent longs - we should be close .hehe

[Rimbuman]

Hi all,

Here a view from a different angle about getting into trading by using demo/paper trading for the beginning/learning trader, it's copy and paste so it is not from my hand.

Paper trading is widely discussed regarding its merits, and whether it is of value to a trader as they try to make the transition to real money trader. One viewpoint is that since paper trading is not real, the profits are meaningless, and are no indication of real money profitability. An opposite viewpoint would state that paper trading is an important step in the trader’s learning progression, and regardless of whether it is real, if the trader cannot ‘properly’ paper trade, then they will not be able to real money trade.

I began trading in early 1995, with the intentions of becoming an options trader; my first trading education was through an oex options teaching service. Besides options training, the service included ‘tape’ reading, trade management AND sp500 index futures trading – also included in the service was the prevalent attitude that paper trading was for ‘sissies’.

So I was a new trader, trying to learn and understand completely new concepts and ideas - what was called a trading method AND I was ‘practicing’ with real money – because paper trading was for ‘sissies’. What did I accomplish, besides a big draw down in my account? I quickly introduced to trading psychology and the related implications – something else I also knew nothing about. Losing money and a trading psychology ‘wreck’, both from the losses and thoughts like I was too ‘stupid’ to ever learn how to trade, became a combination which took me out of futures trading, and then unfortunately carried over into my options trading which I had previously been doing well with. I just couldn’t take it any more – I had to somehow start all over, or just quit for good.

Paper Trading Viewpoints
Consider: simulator fill prices are not real and won’t be attainable with real money. Even if this is correct, is it really an issue unless the trader intends to be a scalper, trading for very small profits, and thus each tick is critical? Granted, but shouldn’t a beginning trader be very selective, focusing on learning their method and the ‘best’ setups that method provides? This would be my viewpoint, and in this capacity paper trading fill prices are not an issue.

Consider: the trades are being done with no risk. No, there isn’t any financial risk in paper trading, but I actually haven’t met nearly as many profitable paper traders as one might expect. Why would this be the case if being able to trade without risk was such an easy thing to do? As well, what about self-esteem risk, and an attitude like - how can I be so bad that I can’t even paper trade? The risk feelings like these are probably greater than that of financial risk, and if they are going to surface, you would want to encounter them before trading real money. As well, even if the issue was only one of financial risk – wouldn’t you want to begin with the confidence of knowing that you were paper trading profitable? It would be hard to imagine a losing paper trading being able to profitably trade real money.

Consider: there is no emotion involved with paper trading. I was in our chat room watching a paper trader post their trades in order for me to give them feedback, and I noticed that one of their specific plan setups wasn’t done. When I asked why, the trader told me that they were ahead for the day and didn’t want to risk those profits. But the profits aren’t real – how can you not take a ‘base’ method setup when paper trading – isn’t that the point? Would you be in agreement, that if paper trading profits could be viewed in this fashion, that it has the ability to become very real and thus emotional to the trader? I would suggest that this is related to paper trading really not being ‘so easy’, and as mentioned above, self-esteem risk can be very emotional.

Besides examples like this, emotions can be added to the paper trading process. Throw away your simulator, and then go into a chat room and post all of your trades – no ‘youknowwhating’ around where you wait to see if the trade was profitable before you post it, like a number of traders that I have seen. What’s the point, and when you consider the underlying implications of ‘needing’ to do this – the issue certainly isn’t about whether paper trading is of value or not, but certainly best to find out before trading real money. You must post immediately and without lag, giving your direction and entry price, along with subsequent posts of any partial profits, and of course your exit, which ultimately is the determinant of whether the trade was profitable. There is no need to make any comments, or answer any questions regarding your trades – simply post the particulars as fast and real time as possible AND see if you feel any emotions doing this in front of the rest of the room while you go through a series of losses. Do you want to add even more emotions? Go through the same posting process, but do so where the rest of the room actually knows the method that you are trading, and what the trades ‘should’ be. You will quickly find out just how emotional paper trading can be – actually a very valuable exercise for the paper trader to do.

Paper Trading And Making It Further Beneficial
I have two predominant problems with paper trading, but this is with the trader’s approach, and not with paper trading by definition: (1) the trader does ‘things’ paper trading that they would-could not do with real money (2) the trader views paper trading profitability, instead of paper trading proficiency, as the guideline of whether they are ready to begin trading real money.

I have seen too many paper traders, continuously and knowingly, over trade ‘non-plan’ trades, with trading size that is greater than they could afford the margin for in a real account – let alone accept the risk of loss, while also holding trades for risk amounts that they would not accept with real money. Viewing paper trading as a ‘step’ in the learning progression and transition to real money trading, it is critical that the paper trader only trades exactly what, and how they would trade with real money. Don’t allow yourself to turn paper trading into a game, supposedly because there is no risk – the risk of making bad habits that you can’t correct is tremendous, and will circumvent any attempt to trade real money. This is the time to learn YOUR basic trading setups, and make necessary adjustments to them and your entry-exit timing, in order to then make money trading them – this is NOT the time to turn your simulator into a pinball machine flipping at any ball that comes near you.

There is a problem with focusing on trading profitability -vs- trading proficiency. To begin with, profitability places the focus on money instead of on plan. And what is profitability – if you take 10 trades and make $75 are you profitable? Technically, if you are net ahead you are profitable, but what if those same 10 trades had a potential of $1,500, and you only made $75 – are you really profitable? This is what I am referring to when I think of trading proficiency. Instead of focusing on the common metrics, such as win:loss or win size:loss size ratios, I am most concerned with the win size:potential win size ratio, and want to maximize this percentage to the extent that is possible.

For instance, when a trader asks about adding trading size, taking the attitude that if they can make $100 trading 3 contracts, then they can make $1,000 by trading 30 contracts, the first thing I ask them is what is their proficiency ratio – why increase contract size and the corresponding trading risk, if you ‘should’ be able to make more money from smaller size? This is especially important for the paper trader, where they should not regard simple profitability as an indication of readiness to trade real money, but consider proficiency – for instance, begin trading real money when you are 60-70 percent proficient with your paper trades.

So What Is Your Viewpoint Regarding Paper Trading?
I never thought that I would ever make a dime trading, let alone be able to trade for a living or become involved with trying to teach others to trade – was this simply a function of starting over and paper trading? Granted that is too simplistic, however, I do know that it would have certainly changed the beginnings that I had, while very much shortening my learning curve, and reducing a lot of pain.

Clearly, I am on the ‘side’ that believes that paper trading is not only beneficial, but that paper trading is also necessary – however the value received will be dependant upon the trader’s approach and attitude. Needless to say, paper trading as described is something that I have always strongly recommended.

Edited October 9, 2013 by Rimbuman

[Paulo1]

My view on paper trading is a simple one, as my view on trading and life is also simple. However, you can complicate it as much as you want.

Paper trading is great for system development, back testing and forward testing (which I prefer). Paper trading / demo trading is really about learning how to use the platform competently. The problem is and the number one reason why most traders loose money is because of emotions, win= happy, loss = sad, most people can not handle a loss or drawdown and begin to make irrational decisions based on emotions rather than following a plan. Paper trading does not teach you anything about trading psychology which is the reason most traders fail.

[binnsy1]

Nice return on the Royal Mail shares 750 GBP worth 1020 GBP at the last look