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[edyzmedieval]

Husar, you can go for the demo account, it's free to use and it gives you virtual capital to test out your skills.

[ztrain909]

Husar, you can go for the demo account, it's free to use and it gives you virtual capital to test out your skills.

Sorry, I forgot to address this. Demo accounts, otherwise known as " paper trading" are useless. They remove the one key ingredient to trading.......emotion.

When you paper trade you have no emotional connection to the trade. You will know exactly what I am talking about the minute you put on a trade with " REAL MONEY."

All the emotions of hope, fear and greed come into play. That is why it is of utmost importance why you should be in a good mental state even before you put on any trades.

Instead of using a demo account it would be best to " backtest " your trading ideas. This will give you a parameter of how your strategy would have worked, although past results are NEVER guaranteed.

You can even backtest strategies using excel. Here are some computer programs that might guide you through the process. http://quantpedia.com/Links/Backtesters

[edyzmedieval]

Well, I differ a bit on the emotion part - because I tried demo accounts, mainly to learn, and I was always into it 100% because I really wanted to see how my knowledge stacked up to proper trading.

So it depends.

But I do suggest trying out paper trading accounts to see how it goes.

[ztrain909]

mainly to learn, and I was always into it 100% because I really wanted to see how my knowledge stacked up to proper trading.

That's what backtesting your system is for. To see how your system stacks up against prior market action. Remember, the market is constantly changing so past results are NEVER guaranteed. It's why it is so important to know your trading rules.

You have follow your trading rules to the tee, to not let emotion rule you( you do have rules don't you?). In order to get to that point it takes great discipline. You cannot achieve that discipline without the risk of loss. Demo accounts have no risk. If this is your first foray into trading you will see that it's easier said then done to see how your knowledge stacks up in the heat of the market behavior.

Instead of a demo account, a good way to start would be to begin trading with a small account($5,000). If you lose it, it's not the end of the world.

It would be a good way for you to put your trading strategy into play with REAL money.

The experience you will gain will be much better than a demo account. You will learn to perform under intense pressure, thereby honing your trading skills and mastering your particular strategy in real time with real money.

[Montmorency]

Instead of a demo account, a good way to start would be to begin trading with a small account($5,000). If you lose it, it's not the end of the world.

Of course, $5000 is not usually a small amount in personal terms. Is there a real minimum threshold for starting trading below which there is no meaningful experience to be gained or returns compounded?

[ztrain909]

Of course, $5000 is not usually a small amount in personal terms. Is there a real minimum threshold for starting trading below which there is no meaningful experience to be gained or returns compounded?

Trust me brother, if you think $5000 is too much money, then you cannot even entertain the idea of trading. I'm sorry.

In order to make money consistently, you have to be well capitalized, because YOU WILL LOSE MONEY.

The key is to try and make sure your winners are greater than your losers.

5k is nothing in trading. Look at the prices of the major stocks, those that move significantly( volatility is actually a good thing for price movement). Most of those prices are $50 or above. So, with 5k your only able to buy a max of barely100 shares, and that's not advisable because you don't ever want to have 100% of your equity at play at one time, especially in one stock. Note : I personally don't trade stocks, I trade futures. You can trade futures with $5,000 also but it is not advisable. Futures have better buying/selling leverage than stocks. Example. Apple's price is at $115/share. To buy 100 shares you will need to have $11,500 in your account. To trade the Nasdaq Index in futures, which Apple is in, you would need only currently $3,960 in your account. That $3,960 is actually a deposit which you get back when you are out of the trade. You basically have more purchasing power for less money.

I apologize if I'm not clear in any of my definitions but I'm not a teacher. I'm actually a truck driver for the last 30 years. I started trading in 2003 and have actually traded only 5 full years since 03'. So you see, trading takes time, patience, learning and a lot of ups and downs if you are NOT disciplined, which I wasn't in the beginning.

Just be patient. Live your life, get your career, stay out of debt, put a portion aside for trading and in the meantime find a trading strategy that fits your personality and test it, then test it some more, then learn it more, then test it more, and keep reading anything you can about trading until the day you are ready to trade with your own money. That day my friend is when the REAL LEARNING begins.

What people need to focus on in trading is NOT how much money you are going to make, rather how much are you going to lose. You must know what you will do in any trading situation even before you put the trade on.

If you concentrate all your energies on minimizing your risk, you will come out on top in the long run.

[Husar]

small account($5,000)

Trust me brother, if you think $5000 is too much money, then you cannot even entertain the idea of trading. I'm sorry.

As I said, my commentary on this is all Backroom material. I'm sorry.

[ztrain909]

Of course, $5000 is not usually a small amount in personal terms. Is there a real minimum threshold for starting trading below which there is no meaningful experience to be gained or returns compounded?

Maybe I misspoke. I thought about it some more and I guess to answer your question it depends on what your goals are. There are brokerage accounts you can open for as little as $500. So yes, you can begin with very little money, but the biggest question is WHY would you?

Why do you want to trade? If you have a good career path and are not really looking to make an additional amount of income then the answer is yes you can begin with little capital and have some fun with it. I'm assuming you want to have fun because I don't understand the " no meaningful experience to be gained or returns compounded" portion of your comment. Why would anyone NOT want to gain experience in any particular endeavor? Plus, if your not concerned with your returns then it must be for kicks and giggles, I guess.


I come at it from a different point of view. All I'm trying to get people to avoid is the " pie in the sky dreams " of making a fortune or even making consistent money without being properly capitalized.

I'd rather people avoid the mistakes that I made. I started with $5,000 and lost it all within a year. Now, that's all my fault and not necessarily a "proper capitalization" problem, but I have gained experience and I have immersed myself in many things having to do with trading for the last 13/14 years, and I can honestly say I'd rather start with good capital.

Again, this is subjective because we're all different people with different objectives, goals and appetite for risk, but the question is the same for us all.

Why do we want to trade?

If the answer is to make a ton of money, then you are in for a rude awakening if you think you can do that starting without being properly capitalized.

If the answer is to try something new and have some fun with it, then by all means, open up a demo account and have a blast.

If the answer is to earn additional income as a steady source, then you have to begin with the proper capital and any free time you have must be consumed with educating yourself on anything to do with the markets and/or your particular strategy.

[Husar]

Okay, now I got some more questions, such as:

If you have 100.000$ to throw away, why would you desperately need additional income from trading? I mean, you already have 100.000$ that you obviously don't even really need given that you're willing to lose them.

What do you think of stocks as an investment? Does it even count as trading if you buy stock and keep it for ten years or so? What if you begin by buying a single share of the company you work for to start collecting more? Worth it if the company is growing?

As for trading, can you even compete with people who build an entire data center two blocks away from the "trading grounds" to always be able to buy and sell faster than you can? Or are those the ones where you open an account and set auto-sell and auto-buy rules?

[edyzmedieval]

Of course, $5000 is not usually a small amount in personal terms. Is there a real minimum threshold for starting trading below which there is no meaningful experience to be gained or returns compounded?

Trading accounts can be started up for very little.

For example, one of the most popular trading platforms - you can start with pretty much 30 dollars. If you're really into this, you can simply start and work your way up, as long as you educate yourself first and you stick to it.