For Trading Futures or Night Trading, Do Not Become A Simulator Junkie
Learning to trade, whether it is stocks, options, ETF's, or even Trading Futures, no matter if you intend to day trade or are thinking about night trading, you must first become a "Master Paper Trader". So exactly what is an MPT and how long does it take to become one? You alone can answer that question when you discover something about yourself.
So often novice traders belive that they can just download a trading platform and start trading with cash, as if they knew the subject of trading futures for the last 20 years. Does a carpenter build a staircase the first time he works with wood? Does a surgeon begin cutting right out of medical school? Does a piano player play Beethoven's 5th symphony just after learning chopsticks? Yet somehow these endeavors do not equate with trading. With trading -- anyone can be a Master Chart Technician as soon as they open up their newly bought software. Forget the education...full speed ahead. And that is why over 80% of day traders lose their shirts and give up trading for a living.
To become an master paper trader, the first thing you must learn to do is "see the market". This means no trading, just watching. Watch the way the market trades, the times of the day the market is volatile or flat, how many contracts trade at at time, etc. Since you want to be a master, watch the Market at the same time each day because that way you will be trading with the same traders every day. In time you will know the charts and become the master paper trader you want to be.
Once you can see the markets and understand the charts, and you has finally mastered technical analysis, the next step is to become a master paper trader. That means using a real time simulator, developing strategies for the market you have been observing. How will you know if the strategies work? Each trading simulator comes with a performance report built in. It will show you your percentage accuracy for the day, week, or longer. This way, you can develop strategies that give you confidence to take the trade because they are tested over and over. This should reduce the fear of pulling the trigger.
But here's the clinker...while it is good to become a master paper trader, you do not want to become a master "simulator junkie". Paper trading, even with a live real time simulator, is just that...paper. There is no cash involved. Many traders can be excellent paper traders but once they go live with cash, well that's a horse of a different color. There is something about putting actual cash on the line that changes the way traders buy and sell. Because of this, novice traders often remain on the simulator indefinitely, It is as if trading is no more than a video game and they, no more than simulator "junkies."
One can only learn to trade through buying and selling. There is an old adage in the Market that says "you can't be considered a real trader unless you have lost money." In essence, simulator junkies will never truly be traders, they will only be video game players using technical analysis charts. The only way to be a true trader is to trade.
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