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Newbie Here


Hello,

I'm looking for a site where I can "paper trade" the S&P 500 and see if I can have some success, before I put out any $$$$$. I don't mind paying for the service, but I'd like to have it in "real time."

Thanks much!
quote:
Originally posted by dt_wannabe

Hi,

First off, I'm a newbie here.

Since this post regarded "paper trading", I was curious as to how well strategies developed from paper trading translate into "real trading".

And I know this was touched on before, but how long should one practice (assuming one has become proficient in chart-reading) using what looks like a profitable strategy with paper trading before taking the dive into doing the real thing.

Many thanks in advance.



welcome to the forum wannabe



I was curious as to how well strategies developed from paper trading translate into "real trading".


Given that your new to daytrading, I would use a 50% reduction factor to set your expectations. For example, if your paper trading indicates that you can produce $100 net profit per trading session, reduce that to $50 net for live trading.

how long should one practice (assuming one has become proficient in chart-reading) using what looks like a profitable strategy with paper trading before taking the dive into doing the real thing.

... i have heard folks suggest anything from 2 weeks to 6 months. I believe the answer to your question is different for every trader. I suggest you ignore the calendar and look at the consistency of your paper trading performance from week to week. Wait until your comfortable with your consistency as well as the risk of failure metrics like your largest single loss, longest losing streak, and maximum account drawdown. Until your trading results are consistent from week to week and you have good control on the risk side of your trading, you will want to keep your working capital (trading account) safely out of harms way.
It's a pity that there isn't a mini-exchange where you can trade $1 per S&P point instead of $50. It would be a good stepping stone from paper trader to the "full" contract.
NQ is $5 per tick ($20 per point) making it a bit easier on the risk side than the ES at $12.50 per tick.

With the NQ a 2 point stop loss is $40, whereas a 2 point stop loss in the ES is $100, and a 2 point stop in the ER2 is $200...
Good point pt_emini. Maybe one should paper trade the NQ first before trying the ES.
Thank you for the advice pt_emini.

I started out with IB's demo program (which supposedly uses last week's market data) to now paper trading real time with Ninja Trader w/ a Zen Fire feed. I'm ready to wire the money to start trading real time(!), but I think its wise to make sure my current strategy is consistent weekly and not just a one week anomaly.

Since my strategy (so far) has been scalping for 1 pt on the ES, I guess my next question is this: how do the paper-trading fills compare with real-trading fills?

I've read that this is an issue (i.e. its much easier to get an order in when your paper-trading than it is with real-trading). From what I have seen with the volume during regular market hours, however, this does not seem to be a big problem (unless, presumably, you are scalping 2-3 ticks).

P.S. My winnings almost always come when my entry points could give me an additional 1 pt profit, which leads me to believe that in the actual market, I would easily hit my stops.
The times that I've used the paper trading sim mode on Ninja Trader I've noticed that the fills have been realistic. In other words, Ninja seems to take note of the number of contracts at the bid or ask that you place your limit order at and will place your order in the same queue and only fill you when you would have in the real world. Based on that, Ninja gives a fairly realistic picture of what you will get.

If/when you start trading for real you should see if you can run a sim mode in parallel with your real trade. I know that you can do this with Ninja. That way you will be able to see if your results are comparable and see if one is more favorable than the other.
I documented 3 months of back/forward testing of the Single Print strategy here in the forum. I found that when I was trading the strategy for real that my results were better than when I traded in sim mode. This is because my entry and exit rules for the paper trades were far stricter than the reality of the situation was.

For example, I would only score a limit fill if the market traded at least 1 tick beyond the limit price and I would only acknowledge a target hit if at least 1 tick past the target. In reality, however, I would sometimes hit the targets and get fills even if the market didn't tick over the price because I place my orders way ahead of time and was right at the front of the queue. This made real time performance better than the simulated performance but only because of my strict and rigorous adherence to the rules and testing methodology.
quote:
Originally posted by dt_wannabe

Thank you for the advice pt_emini.

I started out with IB's demo program (which supposedly uses last week's market data) to now paper trading real time with Ninja Trader w/ a Zen Fire feed.

Since my strategy (so far) has been scalping for 1 pt on the ES, I guess my next question is this: how do the paper-trading fills compare with real-trading fills?

I've read that this is an issue (i.e. its much easier to get an order in when your paper-trading than it is with real-trading).




With the Ninja simulator the ES fills are very conservative. Thus your live trades should be able to replicate your fills with reasonable correlation to your simulator results. I agree with DT's comment that the simulator is conservative and you may find fills a touch easier than the Ninja simulator is giving you presently.