How long should I be spending on paper trading?

[sopodo]

These last few days I have been paper trading as a day trader the whole day from market opening to market closing. Is that too long, I know when I start trading for real I would probably have to go out for such long hours, but when paper trading how long should I spend each day, and should I do it every day? I am just asking, as I may not even be able to do it at all during a day as say If I am at work.

The plan is to to do reading and research in the future when I come home from say work and then later to go full time if say I get good from the paper trading. So how long should I be spending when starting out?

 

[Rhody Trader]

This is a very common question, and one I've personally written about before here. The bottom line basically is that you should demo trade for three purposes. The first is when you're just getting started as you learn pricing, orders, position tracking, etc. The second is when you're dealing with a new trading platform. The third is when you're testing out a strategy. You want to get live trading experience in there as soon as your are functionally ready.

That all said, it sounds like you haven't really sorted out your trading timeframe. You need to pick one you'll be able to consistently trade, not one you can only handle in spurts. Keep in mind that day trading isn't the only way to go.

 

[Mr. Charts]

As far as testing out a strategy is concerned, paper test until you reach consistency in all market conditions, trending, ranging, grinding etc over a large enough sample size to be statistically significant, maybe 500 trades.
Remember that paper trading is unlike the real thing for several reasons, the main one being there is very little emotion in paper trading.
Hope that helps,
Richard

 

[dominationFX]

Paper trade for the rest of your life. Trading is an ongoing commitment to a lifestyle of learning, practice, back testing and the like. Dont burn out, or give up. Paper trade about 1 hour a day, but make sure you do it every day, and log and analyse your results.
Keeping records and planning your trades and going back over them fully every week, is mission critical to success. Good luck.

 

[meanreversion]

I'm not sure how useful paper trading is, as it involves none of the emotions you'll encounter when trading for real. Far better to backtest a few ideas then start trading in the smallest possible amount, and learn that way.

 

[robster970]

I would go one step further MR and just jump straight into a demo account and use that to form opinions on timeframes, strategies, etc

I wouldn't bother with paper trading as it is too distanced from the reality of it all and this guy/girl needs to answer lots of basic questions that are independent of a trading strategy.

 

[Mr. Charts]

imho, if you can't be successful paper trading there is no way you will succeed for real.
Of course, success paper trading is no guarantee of success when you do it for real.

 

[kipptrader]

If you are going to paper trade, make sure you have an accurate environment. Give updown a try.

However, nothing replaces real trading. Open a small (very small) account with someone with sub penny/share pricing and trade very small lots. You won't make a lot of money but you will not lose (or wipe out) either. What you will learn is how to balance your strategy with your emotions.

 

[meanreversion]

Ah yes, demo account .. but isn't that the same as paper trading? It's probably useful to get the hang of how to use the system, but not a true substitute.

 

[Rhody Trader]

Ah yes, demo account .. but isn't that the same as paper trading?

These days the terms mean the same thing. Some of us can actually remember when paper trading actually involved paper, though.

 

[kipptrader]

These days the terms mean the same thing. Some of us can actually remember when paper trading actually involved paper, though.

I still use paper logs for some system tracking

 

[Charlton]

These last few days I have been paper trading as a day trader the whole day from market opening to market closing. Is that too long, I know when I start trading for real I would probably have to go out for such long hours, but when paper trading how long should I spend each day, and should I do it every day? I am just asking, as I may not even be able to do it at all during a day as say If I am at work.

The plan is to to do reading and research in the future when I come home from say work and then later to go full time if say I get good from the paper trading. So how long should I be spending when starting out?

I agree with Rhody Trader - when you feel comfortable with the "mechanics" of placing orders and using the broker's platform, then you no longer need to demo/paper/sim trading for that particular purpose. This is no different to learning how to use a new phone - it's primarily mechanical.

The more difficult thing is learning the characteristics of the market and how this can be utilised in a trading strategy. This is an ever-evolving process, which in its initial stage means trying to evolve a strategy which at least means you are not losing money or at least not much money - you might be prepared to lose some in a small trading account which you classify as "education costs".

This does not mean trading long hours - it means trading wisely with thought and analysis. In the oft quoted phrase it's not the quantity but the quality that counts

Charlton

 

[charliechan]

not until you can trade profitably in your sleep paper trading. other wise, youre just wasting money - something good traders have a natural aversion to.

 

[robster970]

I suggested the demo trading because the chap/chapess has no frame of reference for the act of trading at all. Currently they don't have a strategy, they have no sense of the timeframe that may suit them, they have no feeling for how price moves and finally, they don't know how a platform operates (which imo is the least important thing).

Hence, demo trading would probably add greater value than paper trading. You get a sense of what it would be like, executing in a timeframe you have chosen to trade in. It's a safe place to ****-up without any monetary impact. I would do this for a while and then open a small account and trade a few £ per point and not pennies per point to invoke emotional responses which can then be addressed sooner rather than later.

 

[luckyd1976]

I feel everyone should demo trade first. It's almost a required step no adays. And for the ones who are profitable and comfortable, its time to graduate to live smaller accounts next.


I'm always dusting off demo account (valuable tool) and practicing new stategies here and there. Like some of the crap I read online. I'll go and try it out and mostly discard it after a few months.