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John asked in Business & FinanceInvesting · 1 decade ago

how accurate is paper trading to real live trading in the stock market?

So ive been practicing paper trading for over a year now and im willing to invest real money soon. I had a mock account at about $25,000 and was able to make a steady 200ish dollars a day... not bad i'd say... but i KNOW its paper trading and i want to know before i invest real money is how accurate is my paper account to real money? cuz i know that some of the trades that i got on paper trading wont be filled in real money because somebody else could have gotten that stock at that price from that buy/seller instead of me...

so... anyone with experience in the real market and can compare it to paper trading? If i make money consistently in paper trading will i make money consistently in live trading? the more info the better, thanks :]

Update:

ok well ive been doing daytrading and not really swing trading or investing... so yes i do ALOT of trades that are a limit order or stop order and not really at market price or at the bid.

Update 2:

ok well ive been doing daytrading and not really swing trading or investing... so yes i do ALOT of trades that are a limit order or stop order and not really at market price.

14 Answers

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  • Anonymous
    1 decade ago
    Favorite Answer

    Not very.

    Point one: do you have $25,000 to start real trading tomorrow? Although I will give you credit for starting with a relatively small number. Most people try paper trading with completely unrealistic number for themselves (like $1 million).

    It is difficult to hold positions large enough to profit from trading unless your account balance is in 6 figures or more. The more trading, the bigger the portfolio you need. The average trader (who fails in the end) often trades enough (several times a week) to need a 7 figure portfolio to justify his habits.

    Point two: Did you track realistic trading costs and actual price quotes for the day in question? The costs are part of the reason why a 5 figure trade can be profitable but the same 4 figure trade might not be. The quote problem works this way: did the trade you used to price your buys & sells on paper realistically represent a trade you could have actually hit with real money. Most of the times the answer is no, especially if you are paper trading in small caps, small lots, or aiming a lowest priced buys and highest price sells.

    Point three: Real trading is emotionally very different than paper trading, especially when you are looking at it all the time (or several times a day)...even when you are very good at what you do and understand the emotional roller coaster ride.

    Personal example. I have a position in a speculative investment that I expect to double within the year. To keep it simple, it is a security that is trading for $10 that can be "exchanged" under a complex set of rules in the near future for assets worth $20. $9 of the exchange is cash, so LOGICALLY the security should never trade below $9...right? Guess what? Shortly after I had purchased nearly $300,000 of the security, it fell below $6...not for a minute or an hour...but days! For a week or so I had a $100,000 loss. The trading made zero logical or financial sense...but I still double checked my numbers and my resources. I didn't panic and sell, but it took me a day or two to start buying more. People can talk about nerves of steel, but you have to really feel the burn of the fire on your own arms before you can say for sure if you have them. I expected it to bounce around – that’s the kind of investing I’m good at – but that was crazy. (It was euro panic. People were selling everything priced in euros regardless of price)

    Point four: Do you really have “a thing?” That is, something you intuitively understand and can execute over and over again. If not, you are unlikely to be a successful investor if you trade. Dirty little secret #1 is that the professionals you see talking about making money from trading all really make money – one way or another – getting other people to trade rather than trading themselves. Dirty little secret #2 is that the vast majority of traders don’t beat the S&P 500 index over time.

    My little bit of wisdom is to follow this rule: If you have more than a dozen good ideas in a year or you put your money down on more than three ideas in a quarter, you don’t really know what you are doing. (You don’t have “a thing”)

  • Anonymous
    4 years ago

    1

    Source(s): Invest in Forex Tips http://teres.info/TheTradingCode
  • 6 years ago

    This Site Might Help You.

    RE:

    how accurate is paper trading to real live trading in the stock market?

    So ive been practicing paper trading for over a year now and im willing to invest real money soon. I had a mock account at about $25,000 and was able to make a steady 200ish dollars a day... not bad i'd say... but i KNOW its paper trading and i want to know before i invest real money is how...

    Source(s): accurate paper trading real live trading stock market: https://tr.im/F7flf
  • 1 decade ago

    if you trade on the spot price, aka. the price showed up on the chart, then you basicly doing the same as you would in the real market.

    only thing i can think of is different from trading on the real market is that when you place a stop or limit order, in paper account, when the stock price hit your setting, you will get the stock or sell the stock no matter what. but in the real market when the price hit your setting, there might not be enough offering for all buyer or seller, so you might not actually complete your trade.

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  • Anonymous
    7 years ago

    So..

    I've been trading the market for just a few months. My cousin actually told me about this website ( http://pennystocks.toptips.org/ ) and I signed up immediately after. This is my honest review about their method. I'm not someone who has a lot of time to be researching for ideas because I work many hours. they made it incredibly easy for me to make money in the market. Their reports are easy to read and follow. I've tracked most of the stock ideas that I've received in my e-mail from them and MANY have seen some nice gains after their announcements. I've made a nice profit (55% return on my investment on one, and 112% on the other!) on a couple of suggestions he's given and plan to start trading his ideas a lot more.

    For more info: http://pennystocks.toptips.org/

    I hope it helps

  • ?
    Lv 4
    5 years ago

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  • 5 years ago

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    5 years ago

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  • 5 years ago

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  • kyle
    Lv 4
    4 years ago

    2

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