So, today we're going to talk about
paper trading on a simulator.
What you need to know,
should you do it,
and what to watch out for.
Before I forget,
I'm setting up a new website
and the new website will be called
mytradingroutine.com.
And on this website,
all you'll see is a video
of me showing you exactly
how I find the best stocks
and options, how I place the trade,
and the most important things that
you need to know when picking stocks,
options, when to enter,
when to exit,
and all the good stuff.
So, paper trading simulators...
Are you using them right now?
If not, you should.
And I'll explain in a moment why,
but first of all,
you also see I rearranged my
studio a little bit.
So, yeah. I was busy this morning
because one of the things that I didn't like is that
I was sitting on a chair
or you know,
if you have been watching it,
you know that I wasn't even sitting on
a chair.
I was actually sitting on a little
stool,
something like this.
So, I redecorated it.
What do you think?
I mean, obviously,
it's still the same background,
but now I can stand,
and the camera is a little bit further away,
making a little bit easier for me
to talk to you.
Anyhow...
Let's get started.
I received a question
and I want to show you quickly the
question that I received.
And the question
is...
So, it was from dumitr...
I'm going to butcher this name,
so I better don't say it.
So, he said,
he or she,
"Hello. I've watched that video about the trading
routine. Very informative.
Thank you so much for sharing.
I have a couple of questions.
Is this only a long swing
trading strategy
and also do you do day trading?"
Before I answer the question,
let me say this is here a screenshot.
It's not my phone.
This here is a piece of Amber,
who is helping me,
keeping an eye on all of the comments
that we are receiving.
Really appreciate all the
comments and there's so many coming in.
This one here is from Instagram.
So, Amber screenshot,
screen snap shot it...?
And then sent it to me so that I can
answer it for you here.
This person,
lady or gentleman,
said "Also, what do you think about paper
trading?
I'm trying to do paper trading,
but I know
with real money it is
different. Yeah,
absolutely!
It is different to trade
with real money than
with paper trading.
However,
I think that everybody
should be trading on a simulator
first. So, I want to tell you why that
is.
I want to tell you what to keep in mind
and then I also want to give you a free resource.
I want to give you the,
in my opinion, best trading simulator
that there is on the market,
and the cool thing is,
it is free.
Does that sound good?
Okay. So,
first of all,
why should you paper trade?
Think about it this way...
When they are training pilots,
right? I mean,
to fly a plane
with actual people in there...
How do you train them? First,
on a simulator.
Then when they train
on a simulator
and pass a lot of tests,
then they are allowed to
go into a real plane,
and this is where they are training
with a coach, with a trainer,
with an experienced pilot.
Now think about this,
if they would not
be on a simulator, would it make sense
to go right into a
plane and start flying?
Of course not.
And also, you need to take trading
on a simulator seriously.
It is different than live
trading, but if you lose
money on a simulator,
you will lose money in real trading.
Think about it.
If they would train the pilot
and every single time
on the simulator,
this pilot crashes.
Do you think they'd say,
"You'll be fine!
Just go in the plane.
It'll be OK." Of course
not, right?
So,
same here with paper trading.
Trade on a simulator until
you are successful.
Now, this does not mean that you
will be successful when you're
trading live, but trust
me, it is the other way around.
If you're not successful on the simulator,
chances are that you will never
succeed in live trading.
It will be extremely difficult.
For how long should you be on a simulator?
Well,
in my personal experience,
for at least 40 trades.
It's like for 40 test flights,
let's say on a simulator.
So, why 40 trades?
First of all, 40 trades gives you
enough data to have
a statistically significant
sample.
If you only place three trades
and you say, "Oh my gosh,
all of these three trades are a winning trade.
Let's trade live."
That is not enough.
Even 10 trades is not enough.
So, based on my personal experience,
and when working one on one
with private students,
with traders that I personally
mentor,
that I always say you have to place
at least 40 trades
on a simulator.
So, where do you find a simulator?
Well, there are several companies out there
that are offering
simulators.
My head coach Mark
and I, we tested more than
twelve simulators.
Most of them are not very
realistic
and that's one of the things that you need
in a simulator. You need a realistic simulator.
The one that we found to be
the most realistic is Paper
Money from Think
or Swim. Let me show you
where to find it.
All you need to do is use Google
Paper Money Think
or Swim.
When you go there,
you'll see: Register for
Paper Money Think of Swim.
Very easy, very straightforward.
It's free for 90 days.
So, it's offered by TD Ameritrade,
but you don't need to have an account
with them.
It asks if you have an existing account,
good, if not,
no problem.
All they ask is then...
OK. Create a user ID,
password, first name,
last name, email.
Where are you?
Physical address.
Maybe they're sending you a nice mug.
Who knows?
Trading experience,
they would like to know what trading experience you have.
Anyhow, it's free for 90
days and 90 days should be enough
for you to paper trade
and get some experience
with this.
One more thing.
Very, very,
very important when it comes to
paper trading.
When paper trading,
there's usually a button that
says "reset all"
which means that you know what,
you can wipe out whatever
you did and start over fresh.
And sometimes this is very
appealing, isn't it?
I mean, sometimes it's very tempting to say,
"Oh my gosh! I had a few losing trades.
Let's start over." Don't
do this.
And here's why.
In real life,
in live trading, there is no such a button.
I mean, wouldn't that be nice if such a button
exists where you say,
"Start over. Put all the money back
in the trading account.
All the losses that I had?" No.
Treat your paper trading seriously
because you want to make sure that
you will learn how to climb out
of a hole because you will make
mistakes when paper trading.
And you will make mistakes in real
trading. So, it's better if you learn
how to overcome these mistakes
because don't think
that if you made a mistake once,
you'll never make it again.
Come on.
It will happen.
I believe it happened to me the other day.
I was live trading in one of my
events.
I was live trading in my events
and while explaining something,
accidentally I did
use a limit order
instead of a stop order.
Now, I caught myself,
but you see,
even after all these years of trading,
it can still happen.
So, fortunately, I was able to correct this mistake,
but hey, mistakes happen all the
time. One more thing
before I let you go that
you might be interested in as well.
Let me go back because the
person who asked this question
about paper trading,
which I think is an excellent question,
had a follow up question for me
and said all right.
"And one more question.
As I watched in your video,
you're passionate about soccer."
So, the question is Bayern
or Borussia Dortmund?
There are great clubs in Germany.
And you know,
this is actually funny.
Both.
So, for those of are interested
in soccer at all,
they're both great clubs,
because let me show you something.
I want to go to Google Maps.
This here is Germany.
And you see there over here,
right there, is Dortmund,
and this is where you have Borussia Dortmund.
And then you have Munich.
This is where you have Bayern Munich.
Now, I grew up just
outside of Dortmund. This is where I grew up.
So, let me zoom in here a little bit so that you see
it. Right here,
Hagen.
That's where I was born.
This where I grew up.
Now, if you look at the at the scale,
might be hard to see,
but it's exactly five
miles away from Dortmund.
So, needless to say,
that when you grow up in Hagen,
you are a Borussia Dortmund
fan because it's very easy to just go
there, drive five miles,
and attend the games,
but then you see,
for four college,
I moved to Bavaria,
and then before I came to the US,
I lived in Munich which is all
the way down here.
And when you live in Munich,
you cannot escape Bayern.
So,
to answer the question,
which soccer club Bayern
or Borussia Dortmund?
Borussia Dortmund until I was
probably 16
and 17,
then I was less enthusiastic about
Borussia Dortmund, already got interested in
Bayern, so yes,
I switched sides.
Obviously when I left in Munich,
it was definitely Bayern.
My dad?
Still Borussia Dortmund fan.
He still lives in Hagen.
Therefore,
still Borussia Dortmund fan
and right now,
these days, I'm not following soccer at
all anymore. It's pretty difficult when you are in
the US.
All right. So,
I hope this helped you of
what to do with paper trading,
where to get a paper trading account.
Again, go for Paper Money
with Think or Swim.
It's free for 90 days.
They don't even know that I'm mentioning it here,
but it's a really, really good simulator.
If you enjoyed this video,
make sure that you like it.
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Let me know if this was helpful for you.
I really appreciate all the comments.
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person here,
leave a question.
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