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Charts
that
talk can help improve your trading
If
you’re short on time, but still need
to know exactly what the chart is saying, I recommend you watch the
video below on a new Talking Chart system.
A
patent is pending on this technology and the
users of the Talking Charts have flooded the company with emails and
phone calls of praise. The technology reads and analyzes the details of
the chart, then dictates the analysis right to you. As an added bonus
you’ll hear from 3 different HUMAN voices! No robots here.
Just great chart analysis to go along with very powerful charts.
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PAPER TRADING
You've been to the library and various bookstores, maybe you've even
subscribed to a trading course or two, and you've been watching markets
on your own for a while. You feel confident. You feel ready. You feel
lucky. Time to start trading, right?
Despite these seemingly auspicious beginnings, most first-time traders
who trade without broker assistance lose money and do so fairly quickly
- usually within six months. Some were unprepared for the volatility
that can appear from nowhere. A tell-tale sign of this is failing to
retain sufficient cash in the account as excess margin. Some fail to
invest wisely, such as spending all of their cash to purchase a large
number of cheap options. Some weren't as knowledgeable as they thought
they were. Costs can be significant, for example, if a deliverable
contract is held into the notice period.
Others made classical errors with order usage. An example of this is
using a limit order when a stop order would have been appropriate.
Still others lose their objectivity at the most regrettable times.
Examples of this include moving a stop order to allow for larger loss,
or adding to a losing position. And, of course, contributing to the
financial demise is the mystery of why prices often move in the
opposite direction of what was expected.
Unfortunately, by the time the trader has begun to develop some kind of
defense to the pitfalls and problems described above, usually in the
form of hard-earned trading rules, the cash in the account is too low
to continue. What is needed is a training ground on which mistakes can
be made and lessons can be learned without wiping out trading capital.
Such an educational tool exists and is called paper trading.
Paper trading is fictitious trading meaning that buy and sell
transactions are not carried through to completion in the trading pit.
The trader does not have the market exposure of an actual position and
so, does not have the associated risk. However, trades are filled and
recorded as if they were for real. In order to be beneficial, a paper
trading account should have the following:
Legitimacy
Third-party
involvement is important. When people paper trade on their own, it's
too tempting and too easy to look back at a chart and say, "Oh yes. I
would have bought there." Paper trading without third-party legitimacy
has little value.
Real-time
execution of orders
Market
orders should be filled at or close to the market price.
Current
margin requirements
Current
margin requirements should be used to calculate excess equity in the
account, just as if trades were done for real.
Realistic
execution of orders
Some orders
should be returned as 'unable' and there should be slippage on stop
order fills, just as if trading for real.
Account
statements
Paper
traders should be able to see daily account statements that show trades
for that day, open positions, margin requirements and excess equity.
Cost for
trading
It's
easy to get carried away when paper trading and buy 25 or 50 contracts
at a time. This is unrealistic for most beginners. There should be a
real cost associated with paper trading to curb this impulse.
Educational
support
You
will have questions when paper trading and you will make mistakes. For
the exercise to be worthwhile, you need to be able to rely on
educational support from a knowledgeable staff.
Flexibility
Most
people can't take time out of their day to paper trade. You should be
able to paper trade in the evening and preferably, over the computer.
And you should be able to paper trade for as long as you wish.
Freedom
There
should be no subsequent obligation to trade for real. After all, if the
paper trading reveals a significant short-coming, then the last thing
you should do is commit hard-earned dollars to the program.
Assuming that the above conditions are met and provided that the trader
acts as if the trades are for real, then paper trading can be an
excellent learning tool. World Link Futures has perhaps the best paper
trading program for beginners within the entire futures industry. In
fact, opening a Real Live Paper Trading account is the next step
recommended after you finish reading through this
FREE Beginner's Guide.
Offered by the Chicago Mercantile
Exchange
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