Paper trading large accounts

[TWD]

Company policy prevents me from actively trading. So instead I am constantly trying to find new ways to challenge myself with paper trading.

My most recent experiment has been to try managing large positions. I've found it's very possible (and very dangerous) to double a $100,000 account with futures. It's entirely different when you are taking millions or tens of millions. The market might not be able to support large orders. I set up rules about how much I was allowed to buy at once based on what I saw in the order book. I decided that in any given minute I could only exchange 1 million worth in margin. If I want a larger position I have to wait for another entry. If I have a large position and I'm wrong, I can't just puke everything at once.

However, I am starting to realize that there are probably other obstacles I haven't considered. For instance, I have been using Think or Swim's fees and rates in my spreadsheet. Somehow I just don't think a retail broker will let me short 210 million Euros. I certainly couldn't get away without some sort of a fee or commission, nor do I think they'd still give give me 50:1 leverage on such a position.

I'm wondering if some of you could help provide some pointers that might make my game a little more realistic and useful?

 

[Rhody Trader]

You are correct that 50:1 leverage is not a realistic expectation for a large account. At that point you'll be dealing more through banks rather than retail brokers.

Beyond that, I would comment that you should know the experience of trading with real money is VASTLY different than demo trading. The latter is good for experimenting, but it doesn't come close to replicating the mental experience.

 

[shadowninja]

That is covered in the first line of his post, Rhody.

Here's a challenge. Turn £50 into £50k in 5 months.

 

[new_trader]

1) Pick someone at work that you really hate.
2) Pay them in real money whatever you lose paper trading.

 

[anley]

Sorry but you're generally wasting your time with dummy money because it doesn't matter if you win or lose.

My advice, realise there's far more to trading than the next 5 or 20 min bar. So look to trade from a daily chart and look at the markets once per day. Do it with real money, then you can learn properly.

 

[jiggly]

Company policy prevents me from actively trading.

that never stopped me.

 

[VielGeld]

Beyond that, I would comment that you should know the experience of trading with real money is VASTLY different than demo trading. The latter is good for experimenting, but it doesn't come close to replicating the mental experience.

I disagree with this. If you have live experience, then demo feels almost the same. You're still doing the same thing, so I don't see how your emotions wouldn't come into play.

Maybe it's not the case for other, but that's how it is for me.

 

[Rhody Trader]

I disagree with this. If you have live experience, then demo feels almost the same. You're still doing the same thing, so I don't see how your emotions wouldn't come into play.

Maybe it's not the case for other, but that's how it is for me.

Key part of what you said being "if you have live experience".

If you have traded live, then demo trading can be much more useful because you know where the potential friction points are going to be when implementing a strategy live.