Trading is not a natural endeavor for us. We have no basic skills or understanding of how it works when
we first start out. We have to learn from scratch. Everyone has to start somewhere. Some new traders
have the all or nothing attitude with little or no training and soon lose some of their trades. Once they
experience some losses then fear and pain set in. Most traders who trade without preparation are on a
course of destruction. They will destroy their trading accounts and or emotional strength so as to not
be able to stay in the trading game. So the first order of business in avoiding the fear and pain of
trading is to get some education. Not only technical education of knowing when to enter and exit trades
but, an education in understanding who you are as a trader, the physiological side of trading.
One of the basic laws of trading is to use and stick to a trading system. That
means you use a trading system and have done enough paper trades to know what win-loss ratio to expect over
a span of at least 100 trades. This can be done in increments of 20 trades and keep track of the results in
the trade tracker. If you need to do 100 trades after you have figured out what works then the extra time
will be well worth it. Once you have figured out what works for you then you must use the same criteria
and procedures on every trade. No exceptions. Paper trading makes it safe because there is nothing to fear
because there is nothing to lose. You just won’t sit there and lose money in order to experiment to see
what works if you are trading real money. This is one reason that 80-90% of new traders fail; they do not
learn how to trade before they try to become rich. This is one thing for sure if you want to be successful
at trading you need to study and practice. If you don’t learn how to trade before you start trading with
real money you will go through a great deal of fear and pain.
Once you have developed the skills to follow a mechanical system. Knowing how to pick a high probability
trade, set your stops, and manage the trade, whichever way it moves then you are ready to move to the next
lever. You are ready to open a live account. This is where you will encounter loosing real money and
having to admit that you were wrong on a trade or two.