Newbie needs help! Winning paper trades but losing money trades

[wywywywy]

Hi all,

Basically it goes like this. I am a long term equity holder, but have recently got into trading by spreadbetting, hoping one day (target is 2 years) I can make trading a full time job.

I started by doing 1 a point with a pot of 1000, on DJIA and FTSE mainly (with a bit of US Crude thrown in). Within 6 weeks, my pot has gone up by 700. At that point I thought to myself - I could go full time now!

Then I made the mistake that every newbie makes - I upped my stake to 2 per point and started trading FOREX which I know nothing about. In the process I lost a few hundreds. It is at this moment I realised that I did well only because I was lucky, so I started learning more about trading, particularly technical analysis.

After reading many books/websites (including this one, thanks guys!) I made a lot of trades, both paper and real money, to test my new found "system". However, the problem is... my paper trades made me a lot of paper money, yet my real money trades lost me a lot of real money!

I am at about break even now, but I really don't want to quit this game just yet.

So has anyone got any suggestion about what I should do? What my next step should be? To turn theories into money.

Any advice/comments welcome.

Thanks.

 

[shadowninja]

Trade demo for 2 months. It should test your system through the rough and the smooth. Been through a similar situation in the past. You think your system works as it's racking up pips on demo. Take it to live and hand over your cash. Go back to demo, it works again. It's just bad timing. Every system has its ups and downs. You need to learn how to deal with and minimise drawdowns. Nowadays, I don't give a toss about losing days as they are relatively cheap compared to the good days. In fact, I welcome the bad days cos I know the good days aren't far away.

 

[£10kLoser]

There's always going to be a difference between paper trading and real money trading. No matter how hard you kid yourself, when it's your real money at stake you'll behave differently! Maybe you cut your losses quicker only to see it turn around. Then next time, you'll take your profit before it hits the limit just to make sure you pocket something after that loss.

Maybe you'll refuse a trade because you not really sure, whereas paper trading you take them all. Or, because we all have a gambling streak, you'll take a risky trade on the spur of the moment...

Real money is not the same as paper trading and the problem is psychology. It's our psychology that often (usually, always?) makes the difference between a good trader and a bad one. The problem is, our psychology is governed by our subconscious and the definition of subconscious is something in our mind that we do not know about (so you don't know about it, right?).

Just look at all the little self-destructive habits people have in life - common examples like smoking, drinking, getting to bed too late are seemingly small things but even these can translate into a personality that has an element of self-destruction. Trading psychologists say that traders get out of the market what they subconsciously want and that's usually includes an element of self-destruction.

And boy, can we self-destruct trading!

Unless you are aware of this and able to excercise super-human discipline, real money trading takes on a different aspect from paper trading. Most people eventually get good enough at the technical side of trading but unless you master the psychology, the best methods in the world are useless.

 

[ae589]

Stick to an entry/exit plan, and keep the risk low so you can take 10 hits in a row without seriously denting your account.

 

[FXSCALPER2]

There are people who can do this and there are people who can't. Assuming you have the ability to learn trading, the rest is going to depend on how much of a coward you are. The advice you get is going to be BS. Risk 1%, paper trade, blah, blah. All of it is designed to make people feel good.

If you are a coward, lazy or care too much about money, you will never make it.

 

[ae589]

I bet you all the money in my bank account v all the money in yours that I am taller than you.

 

[gle101]

I bet you all the money in my bank account v all the money in yours that I am taller than you.

Sorry, wrong post.

 

[gle101]

Hi all,

Basically it goes like this. I am a long term equity holder, but have recently got into trading by spreadbetting, hoping one day (target is 2 years) I can make trading a full time job.

I started by doing 1 a point with a pot of 1000, on DJIA and FTSE mainly (with a bit of US Crude thrown in). Within 6 weeks, my pot has gone up by 700. At that point I thought to myself - I could go full time now!

Then I made the mistake that every newbie makes - I upped my stake to 2 per point and started trading FOREX which I know nothing about. In the process I lost a few hundreds. It is at this moment I realised that I did well only because I was lucky, so I started learning more about trading, particularly technical analysis.

After reading many books/websites (including this one, thanks guys!) I made a lot of trades, both paper and real money, to test my new found "system". However, the problem is... my paper trades made me a lot of paper money, yet my real money trades lost me a lot of real money!

I am at about break even now, but I really don't want to quit this game just yet.

So has anyone got any suggestion about what I should do? What my next step should be? To turn theories into money.

Any advice/comments welcome.

Thanks.

Yes, you are doing the right thing. You recognize that there is a problem, and you want to correct this in order to progress further. I would say being a coward or not, has nothing at all to do with trading the markets. In your case, I would read up on money management and stop loss strategy. Regard paper trading only as a way of getting to know the platform, and it might also be useful setting up a strategy. Real trading is altogether another issue, as anyone here with long trading experience will tell you.

 

[lloydbee]

did you paper trade the same trades, did you dissect the trade prices or trades to know why you lost?

 

[Stargunner]

If you win on paper and lose in reality, it's generally because of the following:
Discipline - Easier to ride out the plan when there's not your hard earned cash at risk
Psychology - Fear and greed do not play any part in paper trades. It's fake money, so I tend to just throw it around like a lunatic on paper trades, and sometimes that pays off, but it won't last forever
Your System - If you're following your plan rigidly, maybe your system just doesn't produce consistent profit, or is just having a tough time at the moment, since market conditions have probably changed since you paper traded. I am having a tough time at the moment but my risk plan has kept me safe.

 

[Hate2Lose]

Hi all,

Basically it goes like this. I am a long term equity holder, but have recently got into trading by spreadbetting, hoping one day (target is 2 years) I can make trading a full time job.

I started by doing 1 a point with a pot of 1000, on DJIA and FTSE mainly (with a bit of US Crude thrown in). Within 6 weeks, my pot has gone up by 700. At that point I thought to myself - I could go full time now!

Then I made the mistake that every newbie makes - I upped my stake to 2 per point and started trading FOREX which I know nothing about. In the process I lost a few hundreds. It is at this moment I realised that I did well only because I was lucky, so I started learning more about trading, particularly technical analysis.

After reading many books/websites (including this one, thanks guys!) I made a lot of trades, both paper and real money, to test my new found "system". However, the problem is... my paper trades made me a lot of paper money, yet my real money trades lost me a lot of real money!

I am at about break even now, but I really don't want to quit this game just yet.

So has anyone got any suggestion about what I should do? What my next step should be? To turn theories into money.

Any advice/comments welcome.

Thanks.

In short, keep going!

The problem is, IMO, psychology. You’re more able to think without emotion when there’s no money involved, human nature. The fear of loss is a very strong emotion, if you’re not careful it will take over.

It sounds like your strategies are good, but you need to work on detaching yourself emotionally.

Good luck, keep us posted!

 

[Hoggums]

Er Guys - this thread is 6 years old now. He's probably blown his account 4 or 5 times by now...

 

[Charles Bronson]

I don't think you have a proper defined system and set of rules just yet. I remember myself in the same situation and looking back it was the lack of clarity in everything . Try taking a step back and evaluating everything once again.