DAYTRADING Fundamentals Message Board

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Strategies & Market Trends : DAYTRADING Fundamentals

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To: Eric P who wrote (8895)	6/13/2000 11:12:00 AM
From: Scott Myers	Read Replies (1) of 18137

I think this is an excellent SI thread and would like to thank everyone for their insights. I have lurked on SI for a few years and have followed this thread for quite awhile but never really felt like I could contribute. I do want to weigh in on this paper trading discussion. Although, I am not a daytrader (prefer 1-2 day position trades - swing trader) and your style/experience should dictate somewhat how much paper trading is necessary I could not imagine trading a system without first paper trading. Of course, I have probably errored on the side of paper trading and analysis for too long but I see no reason to jump in too fast. My general approach is: 1) Develop a strategy: here I use lots of old data and I backtest my ideas to see if they're valid. A strategy involves identifying, entry/exit strategies as well as which type of stops. A strategy can't be paper traded until this is clearly defined. 2) Paper trade: Now the system can be tested real time for a reasonable amount of time. 3) "Demo trade": If paper trading results are similar to back testing then I start demo trading. Want to make sure there are no execution issues. 4) System ready: Now the system is ready for full trading, but still requires constant monitoring to be sure getting expected results. Just to clarify that to date I have yet to get past "demo trading" although after about two years of effort I am finally successfully trading at this level for one of my systems. Before getting into this trading game, I expected it to be alot easier to find a workable system. But it's not easy at all and each time I think I have it finally I realize whoops - "I didn't consider...." Clearly some of you don't need to go through the analsys that I do but I don't feel I can trust myself to be disciplined without the defined rules and the four step process. Does anyone else - I know Eric P does - go through a similar rigid analysis of there systems before trading it? Cheers, Scott

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