Paper Trading Doesn’t Work
D.R. Barton says “paper trading” doesn’t work. He’s right. Here’s a much better way:
- Develop and back test your system or strategy. This can be done with computer software or by hand, looking back at charts.
- Do real-time testing on live data. Keep track of points won or lost and not dollars and cents!
- Instead of paper trading, use real trading, in very small size, to practice. Stock traders can trade 10 share lots. Commodity traders can trade e-mini contracts and forex traders can trade mini forex contracts.
- Once you have been consistently profitable, only then can you ramp up your trading size.
- Ramp up slowly!
