Page 11 - Trading #101 Course – PART II TWO: SUCCESSFUL TRADING PIE – www.traderscoach.com

TRADING #101 COURSE – PART II TWO: SUCCESSFUL TRADING PIE – WWW.TRADERSCOACH.COM

• Paper trading is for sissies. Well, no one has ever really said that to me, but
the implication is there. You know, real men don’t paper trade (or eat quiche); if
you are man enough (or woman enough) to trade with real money, you can win in
the markets, and so forth. It just seems like there is this macho thing where
traders feel that “… I’m tough enough to get my ass kicked, and that’s how I’m
going to learn.…” The reality is that, even after profitably paper trading, chances
are you’ll get your ass kicked at some point or another anyway. The difference is
that when you do, you’ll have a better idea of why it happened and how to
prevent it in the future.

All that matters right now is: What do you think about paper trading? My sincere hope is
that you see the benefit and will implement a paper-trading plan to test your rules and
see how they hold up prior to putting your money on the line.

And for the more advanced traders who already know from experience that they have a
winning system, keep an open mind and paper trade through any challenging draw
downs. Test a new trading idea or approach by paper trading it first to see if your draw
down might be the catalyst for a new way of trading.

Set Up Multiple Brokerage Accounts to Monitor

Your Trading Results

After your paper trading phase when you are trading live, you will want to have separate
accounts for each type of trading you are doing. For example:

1.) Day trading account.

2.) Position trading account.

3.) Investing account.

You may decide that it helps to separate your accounts by market as well, such as a
separate account for futures, and stocks, and forex, depending on how many markets
you decide to trade. Because of the different needs of each type of market, from the
margin parameters to the expiration of contracts, etc., you will find having different
accounts will organize your approach.

This separation of accounts will assist you in analyzing results more easily between
your different types of trading to determine which types are more profitable. You can
determine which time frames, markets, and approaches are more profitable. Look to
see which market cycles each does better in as well.
Another benefit of this approach is that you will naturally be diversifying your portfolio
among various markets and time frames, thereby lowering your risk.

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