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How Start Risk-Free Without Risking A Single Penny

September 6, 2010

It is possible to have the best daytrading program but you’ll never make any cash if you don’t take action and actually start trading. But how can you start without risking a single penny of your personal cash?
After all, you are still new to trading and don’t want to lose thousands of dollars because you made a little mistake in your trading strategy, do you?

The best thing you can do to get started is to get a so-called “Paper Trading Account”. And the best: You can get a paper trading account for free out of your brokerage service. Or just contact me and I’ll set you up having a free paper trading account.
So what is a paper trading account?

A paper trading account let’s you trade your system with “virtual money”. You will get live quotes and can enter the trades according to your plan. The daytrading system will simulate fills, and you’ll find yourself inside a trading position. Paper trading accounts show the profit and loss in real time, and you can see LIVE how a lot cash you are making or losing. Keep in mind that we’re talking about “virtual money”, so actually you’re not producing any funds yet.
Why you MUST trade your day trading system over a paper trading account initial.

The biggest enemy of a trader is discipline. Traders lose since with the lack of discipline. Your day trading plan might be excellent, but if you don’t have the discipline to follow your trading plan then you’re doomed. Trading your system over a paper trading account will aid you to gain confidence in your daytrading system and developing the needed discipline to actually make money with it.

Don’t make this mistake
Several traders start “improving” their trading system after they experienced a loss or a few losers inside a row. Though encountering a loser might be exactly within the expectations of your system, you start questioning the system. You start “improving” the system by changing a handful of parameters or adding some filters. You forget that you tested your system on a lot more than 2,000 trades; you traded it for a few days and consider that’s it needs some “fine tuning”.

That’s the biggest mistake a trader can make. In case you developed your system based about the outline I gave you in Step 1 and tested it against the principles I gave you in Step 2, then most likely you have a robust daytrading system.

Keep in mind that trading a system does NOT mean having an ATM in your front yard. Losses are part of our business, and NO trading system has an equity curve that’s straight pointing up without any dips. You have to trade your system for at least 40 trades before you ought to consider about modifying it.
How you can become a successful trader
In order to become a profitable trader you need a trading strategy. After reading thus far you already figured that out, did you? :-)

Equally important is having the discipline to follow the plan.
Lack of discipline is caused by your emotions, basically greed and fear:
You fear losses and if you’re experiencing a winner you become greedy. And that’s when you start tampering with your system: You might want to give your trade “a little bit much more room” and increase the stop, or you want to “get a couple of dollars more” and start moving your profit goal. And BOOM: You just lost the discipline you need.
By watching your trades over a paper trading account you will learn a lot about yourself and how to deal with emotions:

•Can you “pull the trigger” when your entry signal appears?

•How do you feel when you see the trade moving against you?
Do you feel the urge of moving your stop loss?

•How do you feel if your trade makes a profit?
Do you want to get out?
Do you want to stay in a little bit longer?

•Do you have the discipline to trade your system according to your rules?
Trading a system over a paper trading account will aid you:

•Watching your self and your feelings.

•Helping you dealing with your feelings.

•Developing the discipline you need to become a profitable trader.

•And of course: testing your trading system under “realistic” marketplace conditions
A neat trick to increase your learning curve
The greatest way to trade your system is to fully automate it!

By automating a system you’ll immediately gain these four benefits:

Benefit #1: Discipline
The easiest way to follow a trading plan is to automate it. Practically each and every trading system can be automated, and you could let the computer trade for you. You won’t have to worry about your discipline any longer, as the computer mechanically trades each and every setup for you.

Benefit #2: Controlling your emotions
Automating a system removes emotions from trading. In case you don’t automate your strategy try to produce decisions when the industry is moving, you are liable to become emotionally attached to positions. You may possibly experience panic and indecision when the marketplace does not move in your favor, as you do not have a prepared response. That’s when most traders lose their funds. In case you automate your system the computer will trade for you no matter what the market does.

Benefit #3: Controlling your losses
You probably have heard the saying Let your profits run. Unfortunately most traders let their losses run. Automating a trading system will get you out of a position if your predefined stop is hit. Unless you override the system to give the trade a little bit more room the computer will stop the loss and therefore limit your losses.

Benefit #4: Commitment
You won’t believe how many traders show a lack of commitment and therefore lose funds. Lack of commitment means that they stop trading following the initial loss, and don’t give their system a chance to create back the money they lost. Trading isn’t a one-way street, and losses are part of our business. In case you can’t accept the fact that there is going to be losses, you shouldn’t trade. Fortunately the automation of the trading system can assist you to overcome this problem; an automated trading system continues trading according to the rules, and therefore adds much a lot more consistency to your trading.

The next step
Should you read until here, then you learned a lot. By know you know
•How to define your economic and trading goals.
•How to select the best marketplace for your trading goals.
•What timeframe you ought to trade in.
•The difference between trading styles and the best way to find the best a single for you.
•How to create a basic trading strategy.
•How to produce sure that your trading program will work in reality
•How to start trading your system without risking a single penny
•What it takes to become a successful trader
•How to develop the habits of successful traders
•A shortcut to become a profitable trader
Now the ball is in your court. It’s up to you to take the first step.

In case you want to get started within the next 24h, then you should definitely check out the trading systems Smart Start and EaglePro.

Each systems are fully automated, and they have a risk/reward ratio that’s perfect for beginners. Each and every system comes having a free paper trading account that lets you test the system risk-free.
It’s your turn now.

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