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How to Start Paper Trading

Ads. By IQ Option

In today’s video I’m gonna talk about the benefits of paper trading and why you should be using it as a new or advancing trader.

I’m gonna talk to you about what I love about paper trading and really why I think everyone should be using it if you haven’t found kind of your style or your methodology. Or if you’re looking to explore new strategies.

If you listen to the SteadyTrade podcast, you’ll hear Stephen and I talk a lot about finding your pattern, finding your niche. And we quite frequently get the question, a good question,

How do I find my niche?
How do I find what works for me when I’m putting real money on the line?
And maybe I’m trying the strategy and I’m refining it and I’m slowly bleeding my account with small losses. And small losses are part of trading. You’re gonna have rough periods, you’re gonna go into slumps.

But the nice thing about paper trading is you don’t take that small account on those rides as you tweak and test these particular setups. Now, the great thing about StocksToTrade paper trading is it’s really, I like to say it’s as real as it gets.

Because what we do, there’s many paper trading platforms out there, and you can use any of them, but the cool thing about what we’ve done with StocksToTrade is it’s tied to live market data.

A lot of paper trading platforms will just take the end of day price, the opening day price and average daily price and kind of track your trade that way. The way we do it, is if you place an order for 1000 shares of XYZ, that stock actually has to trade 1000 shares at that price for you to technically get filled on your paper trading order.

So it’s very realistic. You’re not taking the average price, you’re trading liquid stocks. And that gives you as true to real as it gets. Now, a lot of people will say, hey, there’s no skin in the game, you’re not risking real money, the emotion isn’t there.

While that is true, I say you trying kinda play for lack of a better term, a mental trick on yourself. I mean, force yourself to say, if this is a $3,000 paper trading account, this is it.

If I blow up this account, if I bring this $3,000 account down to $200, then I need to reassess what I’m doing, I need to rewrite my rules, I need to try different strategies.

Don’t be like, Oh, it’s just paper money, it’s not real, It’s like a video game, treat it real and actually tie yourself to that account balance, even if it isn’t a real dollar and cents account balance.

And I think that’s one thing that people overlook, they kind of act a little flippant about paper trading, they don’t really put their heart and soul into it. And then the big thing is track these trades.

And if you make a successful paper trade, put that in your spreadsheet, put it in your tracking software however, you track these things, name your setups, and see what works for you.

And that’s how you ultimately find your setup. And if you have a particular setup, say it’s buying late day breaks, which is a VWAP hold setup I talked about a lot and all of a sudden, you took your thousand dollar paper trading account and turned it into a $4,000 paper trading account in a couple weeks, then say okay, now I’m gonna start risking real money.

So use it to test these strategies, use it to see if it actually works. Because a lot of us are wired differently. Some of us are just wired to be short sellers, some of us are wired to be breakout buyers.

So it’s the best way to test that. And then really, if you’ve never shorted the stock this the kinda the last point if you’ve never short sold, especially these lower price stocks, and if you’re not familiar with short selling, we’ve done several article on the channel explaining it, please I implore you if you’ve never shorted a stock, within any time in your life, don’t do it with real money.

It is a high risk to reward setup. There’s a lot of some of the best traders out there, Tim Grittani, Steven Dux, Tim Sykes a lot of these guys the best out there are mostly short sellers.

But it’s dangerous game, it’s a risky strategy please use paper trading to test it or any strategy. So again make sure you’re using paper trading with new strategy, make sure you track every detail and see what really works.

Sometimes you’ll think this works and this you think A works and it’s actually B that works.

Thanks a lot. And if you’re using paper trading and if it’s worked for you or even if it hasn’t worked for you, maybe you’re one of the doubters of paper trading, be sure comment below. We’d like to hear your input on how you’ve used paper trading and if you think it’s helped your trading and helped you grow as an evolving trader.

We’d like to thank you for reading our article. We really wanna help you learn, grow and evolve and become a consistently profitable traders. We’re proud of the tools we built in StocksToTrade and wanna help you maximize your success.

Be sure to check out the other article over there.