Page 7 - Trading #101 Course – PART II TWO: SUCCESSFUL TRADING PIE – www.traderscoach.com

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

• Carefully select the right orders to enter the market. See list of order types in
Chapter Six of this book.

The key to success in implementing these rules is, identifying the current market cycle
and then identifying profitable entry and exit signals that suit that cycle. For this you will
require information from either a technical source, a fundamental source, or a
combination of these two.
There are many software providers, news feeds, and other tools that can enable you to
obtain reliable signals. Part of your due diligence is to identify the best tools for your
specific situation and utilize those tools.

The Importance of Paper Trading

It’s beneficial to be profitable by paper trading first before trading with real money.

While paper trading will not have the same psychological feel as trading with real
money, it is a useful way to practice your trading skills in a risk-free environment so that
you can focus on your financial approach and trading rules. Paper trading gives you
time to hone your trading skills without losing money.

Those of you, who are students of mine or have read my book, The ART® of Trading,
already know my position in favor of paper trading. Ironically, this topic is frequently
debated and there are a few traders that who have gone on record as opposing the
entire idea. We’ll go into the pros and cons of the subject here in this chapter.

Every financial market is a championship arena, and trading is a zero-sum game. When
you enter any financial market, you will be competing against some very skilled
professionals. If you enter the market with your hard-earned money as a novice, you will
be competing against traders who have more skill, more experience, and a larger
account size. To give yourself a fighting chance, you need to enter the markets as a
skilled a professional. Anything less will make it impossible to succeed in trading on a
consistent basis.

The safest way to develop your trading skills is by paper trading, which allows you to
practice without the pressure of potentially losing money. If you cannot be profitable
paper trading, how on earth do you plan to be profitable trading with real money and
more stress?

As I mentioned earlier, some traders oppose paper trading; they believe that it is
useless because you won’t feel the psychological emotions that you experience when
trading with real money. I strongly disagree with this. As a matter of fact, in the
beginning, you will find that, surprisingly enough, paper trading creates an emotional
roller coaster like trading with real money. That is, it does if you approach paper trading
with the same dedication.

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