Stock Trading: How To Paper Trade With A Purpose
I've covered this before and who knows I'll probably cover it again but it's so important for you as a trader that you really can never cover too much so let's dig in hey it's clay trader at clay trader calm and this topic I want to talk about paper trading and wryly it's called paper trading power like I said I've talked about it before and I'll probably talk about it again because it's something that is very beautiful however it's very dangerous at the same time so I want to dig a little bit more into that and actually share one of the tools I've used in the past and I can't say I've use it anytime recently but I want to share it and if you want to use it in your trading you know then you are free to do that so let's just first talk about a couple broad concepts here and the first beautiful thing about paper trading is it's risk free now what is paper trading real quick you're just pretending now you're putting on your imagination cap and you're pretending that you're buying you're pretending that you're selling but the thing that's tricky is that the pretending can get you in trouble because sometimes you start to assume things more so in your favor but I'll get to that later on in the video but first of all I like that risk free there's no real money it's all imagination it's all pretend so you're not going to lose any money the second big thing it's going to allow you to fine-tune your strategy now if you're somebody sitting here and saying yeah strategy I think I got a strategy my strategy is to make money right if that's you you know you need to find a strategy but when you find one that's only kind of half the battle you need to fine-tune it and there's nothing worse than fine-tuning it with real money on the line there's no there's no need for that you don't need to lose real money as you're fine-tuning you know tweaking your strategy getting it to where it needs to be and then third and the best one and these two basically feed into it is it's a great confidence builder you know there's nothing more nerve-wracking than you know hopping into a trade without confidence you know it's one of those areas where if you've never trade the stock it you probably can't relate to it too much but if you have traded you you know the feeling when you click the buy button and then you start to see the numbers flash you're making money you're losing money I mean without a system and strategy in place that can be very very hectic but confidence can be great for that and help you know help you avoid you know the panic inside your head but in order to get this confidence a great way to do it is not to make money because if you're just trying to make money out of the gates to build confidence you're going to lose money because you need to you know I have a fine-tuned strategy you need to understand how your risk management systems play out but in order to do that you gotta you know you got to test things out but you don't have to test things out with real money you can test them out in a risk-free manner and that's paper trading so what I want to do now is go to my screen top and show you a spreadsheet that I use and then how you can implement it as you're trying to gain confidence as a trader fine-tune your strategies and of course it's all risk-free welcome to my desktop here is the spreadsheet that we're going to go over but the main theme here that I want to get across is making our lives difficult why are we trying to make our lives difficult well real trading is already hard enough you have your money on the line emotions start to creep in things are just different any way you slice it things are always going to be different from paper trading to actual trading and our goal is let's try to make let's try to make it as smooth as a transition as possible and the best way to do that is to make our lives as difficult as possible on paper when we're doing this the problem I have with the virtual trading and you know just kind of the way a lot of people do the paper trading even if they're using you know the old-school method of a note you know pen and paper they make their lives too easy they make too many assumptions in their favor this spreadsheet is designed to totally flip that around we are making everything against us and if we can show profits with this sort of system then you know that just increases our likelihood that okay when we do actually get in a real trading our odds of success should go up that much more now it's still not going to be a flawless totally perfect transact or transition because real trading is going to be different but the people people that make their lives too easy during paper trading they just have way too hard of a time when you get into actual trading because all of a sudden all these assumptions that they were making are no longer coming true so we're going to flip that around and make our lives difficult so what I want to focus on here is reality and then paper trade so there's two key colors here orange gold whatever you want to call that and then green one of them is what we want so we're looking at a chart setup let's say and we say you know what if this was a real thing if this was reality I would I would want to get in at a certain point but in order to get in at that certain point another price needs to be hit so we'll get into that more as we go through the sheet but just know that two things are going on here there's reality what we would actually do but then what we need to happen from the perspective of our spreadsheet here and paper trading so just starting up here first point is the data you only type in the areas with the light blue so if you don't see light blue don't touch it don't type in it so the date will just say here's the date and then the stock XYZ I know these two things seem simple but again we're trying to figure out a strategy we're trying to fine-tune something we're trying to just build confidence and these little simple details like date and stock really go a long way because when you're you know what we're doing here is also building the trading journal so when you're going back through the trading journal in your spreadsheet you're saying now well at what point time was all this trade what was I thinking here well if you have the date up there it's a lot easier to go back to that point in the chart and you know relook at things so simple details oftentimes make you know the biggest biggest difference so get those simple details up there now here we get to reality and paper trading so actually let's take a step back over here you have your commissions so if you are trading stocks you know your will just go with one of these ridiculous ones that you know know per trade now if your options trader that would be where you put your base fee and you know some stock trigger stockbrokers offer the per share Commission so that's where you would put that so that number to obviously be zero then you just have per share and then for again option traders this would be your per contract fee so for whatever you're paying per contract so we got our fees in order and I do want to at least start the soft notice what happens immediately we always start off in the hole there is the first thing that you have to realize is the way the spread shot you can see it's already calculating as soon as we buy in we're in the hole because right on the buy we have that Commission so if your Commission's are at $you're in the hole $right off the get-go so there's a the first little example of do your research on brokers find somebody that's cheap because the lower you can get that number down the lower you're going to start off in the hole so keep that in mind that's because that's the reality of the situation right there 999 our loss right off the bat we are you know starting behind because of Commission's now there's no way around that commissions are just part of the game but let that serve as a motivation to really go out there and figure out you know broker that offers friendly Commission so get into the spreadsheet here now reality and paper trading so we're looking at a chart we're looking at a set button so you know what based off this system or strategy I would get in at that point so let's just say that point is ten dollars and five cents now in order for you to allow yourself to say okay I got in at the price has to hit ten now why are we doing that well this is where things get too distorted where people are too quote/unquote nice to themselves and make too many favorable assumptions no in reality the price may go down there and just tap 1005 for maybe like 50 shares but then people say okay I got all my shares when if this was the real thing maybe you would have gotten a partial fill maybe you wouldn't have gotten anything at all but by by allowing it to drop below that okay it's a pretty safe assumption that if you wanted it in at 1005 and the share price actually went down to $10 then yeah I think you would have probably gotten in perfect so yes there is a first distinction there in order for you know you to be considered in and in order for the spreadsheet to consider that you're in the price needs to hit $10 now all the calculations are being based off a 1005 they're not being based off of $10 let me say that in all the calculation on the spreadsheet are being based off an entry point of 1005 not ten dollars but the price has to hit ten dollars in order for you to be considered in do you see how that's turned against us may say all that I don't like this that that's too deadly that that why are you tilting things against us like that exactly we got to make our lives difficult so the question becomes do you get filled or not if you did click one if you don't click zero so in this case we'll say that yeah you do get in so now you're into the into the trade well how many shares are you in for this let's just say we're in for five hundred shares so now you can see over here this auto-populates we have 500 shares left you know in our trade so back here or on the date here let's just say on the same day you're saying you know what based off of what my chart set up a scene I would like to you know sell some shares I'd like to lock in some profits at let's just say ten dollars and 20 cents now in order for you to be able to say again over here is filled so in order for you to say yes I got filled I was able to sell shares the price is going to have to hit ten twenty three again do you notice how we're making our lives difficult in order to say that we sold for profit the price actually needs to hit ten dollars and 23 cents again in order to sell in order for the spreadsheet to be able to say yeah you sold at ten twenty the price when you're watching the action actually needs to have hit 10 dollars and 23 cents but we're only getting credited for ten dollars and 20 cents again the virtual trading stuff if it just taps ten twenty and it could maybe maybe there's literally like ten shares that are sold there it would automatically say okay up you're sold yep you're all out that that's not how it works you may not have gotten out of any shares there so we need to make sure that it actually goes beyond where you'd want to sell to insure that okay yeah you probably would have definitely gotten in sold at ten dollars and twenty cents if the price actually went up to ten dollars and 23 cents so your reality you know what you want what you would want to do at ten twenty price needs to hit ten twenty three so in order to say you got filled as long as if the price does go up there and hit ten twenty three or ten two for now what number should you use what kind of fudge factor you know that's up to you obviously if your if you go 1040 you know that's making life way too difficult that's unrealistic you know for you know it's going to vary you know if you're talking about a $300 stock then yeah 25 30 40 cents makes sense but when we talk about a $10 stock you know a few cents that's all you need to do you know if you're talking about a stock that's a buck 50 you really a penny a couple pennies is going to do but for you know a ten dollar stock that's way too much but you know 10 23 1024 you know 10 25 I'd size probably even a little bit too much on to but it point is it needs to be up now 1021 and that's that's a little too easy you know 1022 okay that's fine but for me I think 10 23 is a good little sweet spot there so if the price does hit 10 23 all right you are in now how many shares let's just say you're at that point you're looking to sell 200 shares at that point you are now at 20 you made twenty dollars and one cent on that transaction now down here you're thinking wait I just made 20 bucks how am ia up $10 well remember we have these Commission's that are being factored in so at least you're out of the hole now but that's why you know the commissions there are going to add up now let's say maybe this is a swing trade so you're looking to sell the next day and you want to next exit point you want to be at let's just say 1037 well remember the price needs to go up beyond that so in order to say that we actually did sell at we're going to need the price that hit again let's make our lives difficult but let's say in this situation nope you didn't get fill or and at this point we're looking to sell just 100 shares at that at time you know we have 300 left we want to sell another 100 but at this point time let's say nope it didn't get quite get filled so you type that in you know nothing happened that's just telling the spreadsheet okay you didn't make any gains or losses because just simply nothing happened but over here is very important maybe I got knocked down by you know the 50 SMA on five minutes I don't know I'm just totally making this out maybe that will help you out but point being take advantage remember trying to do a trading journal and you know keep in mind about you know what's going on and what sort of notes you you kind of notice about maybe why didn't get filled you know was it close was it not even close did something knock it down before the price got there I'm just knocked on your earth not write down your observations and that way when you go back to it again you can go back on the date look at the chart and then see what was in your mind a common pitfall especially for me is I'll remember and then you know five minutes later wait what how was it what and then it's amazing how quick your mind can forget stuff so write stuff down notes comments thoughts all that stuff use this area over here it can be very helpful so let's say another day goes die goes by and you're thinking all right you know I want to revise this down let's say I just want to try to get out at to at this point so again we got to make our eyes difficult well in order to get out at we actually need the price to hit and in this case we're still looking to sell those hundred shares and yeah this time it does work out so they're made some money they're made $17 you can see where our gains are at again they're not going to be you know corresponding exactly because we have those Commission's that are being factored in here so again let's say and keep in mind we now have 200 shares left hopefully that makes sense we sold 200 here we tried to sell hundred there but remember we did not get filled then we tried again for 100 we did get filled that's why we typed one so you know 200 plus 100 is 300 and you know obviously after take that out of 500 hopefully we can follow that math we have 200 shares left and then let's just say the next day we get we want to sell at so in order to do that while the price actually need to hit 1053 and we do get filled there and this is for another hundred shares so there we go make some more money on that we're up to 62 dollars on the trade and then finally the next day we'll say we get I at this point you have you should have a stop loss in if you're running and testing a strategy that doesn't have a stop loss then you have a severe problem you better have a stop loss and so let's say eventually at some point it's moving up but you want it you just you don't want to just sell for the sake of selling you want to stopped out so he eventually let's just say you end up getting out at 1062 so that was your exit exit now why are these both the same well it's a stoploss you know what that is so if it gets hit then you're out so at that level it is what it is at that point the price drops back down and hits it you're out and that would have just been for your final hundred shares so there is what you made you have zero shares left and I at this point you know hit my trailing stop loss which was put at I don't have a 1% of the current price and who knows that might not make any sense point pain take some notes ok what why did you finally get out well it hit your stop-loss or trailing stop or whatever and you're out so there's your gain and that does factoring commissions let's just tie this let's say you can get this down to 695 so 109 oh 5 what would make what would be the difference of notice how much your gains went up not a whole lot but you do this over and over and over again throughout the course of a week a month a year it's amazing how much you know even just a three dollar difference could make now a couple other notes if you are doing options then you know the numbers that show up in this column just remember them you can just multiply that kind of in your head by a hundred and that's the actual amount you're making that's just you know standard option stuff there each contracts is 100 shares so just multiply that by hundred on no need to explain that if you're trading options you should understand the importance of that 100 number and then also down here if you are shorting if this number is negative that is a good thing because the way the math is working you will get negative numbers but when you're shorting negative numbers are good because that would imply that you're in the profit and the price is going downwards which is how you're making money you can see this here you know I just got so you could start all over again new date new stock if you do run out of room then you can always just take this copy it move it down and you're just going to want to right-click and then just do that first one paste it and then right here you have a whole new data set and then finally actually let me move the spreadsheet up some so you can see it no you can name these I don't know you could name them by a strategy you can name them by a date maybe you're trying the billy-bob strategy I don't know and I'm just totally making billy-bob strategy and then you could go and rename this one something else if you wanted to again there's nothing on this spreadsheet or on that tab but that's really just as easy as you know you coming over here copying coming over this one and then you can just again that first one right there have to readjust the columns a little bit but easiest way I do it is just you know use this one here but you can get us fancy with it as you want the main theme here that I'm trying to get across is making our lives difficult understanding that there is a difference and there needs to be a difference tilted against us from reality and actual paper trading so when you're buying price needs to actually go lower than what you would want to get in at when you're selling the price action needs to go higher than what you would actually want to sell at in order to get credit for the sell so if there are any other questions on this you know you can let me know but like I said we need to make our lives difficult the more difficult they get going into real trading the the higher likelihood we have of actually turning profit because I see time and time again I'm losing money you know I was making money when I was paper trading but then as soon as I go to real money I'm losing money maybe you can relate to this well my guess is it's because you made your life way way way too easy in the world of paper trading when it comes to all this sort of stuff so yes it's going to be more difficult to make money but that's just the point of it so keep that in mind so as I noted in the video you can click on the screen right now and that's going to take you to the place that you can find the spreadsheet and get that email to you you can also click down below if you're watching this on my site or YouTube and again that link will take you to other location where you can sign up to have this spreadsheet email to you and that way you can leverage things against you make your life a little bit more difficult but as I have said paper trading the pitfall the dangerous part about it is you know you can exaggerate things in your favor and that's the exact opposite of what we want to do because when you go with real money you know it's still not going to be the same as paper trading that's why we need to make paper trading as difficult as possible and that's what that spreadsheet is designed to do if you have any questions or comments please leave those down below if you enjoyed the video and find out you know videos like this and tools like this helpful you know please click the like button if you're watching this on youtube or click the share button if you're watching this on my site clay trader.com and you know I like to hear feedback on whether or not you know this is worth your time or if I'm just you know quite frankly wasting my time so feedback is definitely appreciated thanks for watching get out there be realistic in your paper trading and trade without emotion.
Options Trading, Stock Trading, Penny Trading, Paper Trading, Learn to Trade, How To Paper Trade, Practice Trading, Trading Simulator, Free Paper Trading, Trading Systmes
I've covered this before and who knows I'll probably cover it again but it's so important for you as a trader that you really can never cover too much so let's dig in hey it's clay trader at clay trader calm and this topic I want to talk about paper trading and wryly it's called paper trading power like I said I've talked about it before and I'll probably talk about it again because it's something that is very beautiful however it's very dangerous at the same time so I want to dig a little bit more into that and actually share one of the tools I've used in the past and I can't say I've use it anytime recently but I want to share it and if you want to use it in your trading you know then you are free to do that so let's just first talk about a couple broad concepts here and the first beautiful thing about paper trading is it's risk free now what is paper trading real quick you're just pretending now you're putting on your imagination cap and you're pretending that you're buying you're pretending that you're selling but the thing that's tricky is that the pretending can get you in trouble because sometimes you start to assume things more so in your favor but I'll get to that later on in the video but first of all I like that risk free there's no real money it's all imagination it's all pretend so you're not going to lose any money the second big thing it's going to allow you to fine-tune your strategy now if you're somebody sitting here and saying yeah strategy I think I got a strategy my strategy is to make money right if that's you you know you need to find a strategy but when you find one that's only kind of half the battle you need to fine-tune it and there's nothing worse than fine-tuning it with real money on the line there's no there's no need for that you don't need to lose real money as you're fine-tuning you know tweaking your strategy getting it to where it needs to be and then third and the best one and these two basically feed into it is it's a great confidence builder you know there's nothing more nerve-wracking than you know hopping into a trade without confidence you know it's one of those areas where if you've never trade the stock it you probably can't relate to it too much but if you have traded you you know the feeling when you click the buy button and then you start to see the numbers flash you're making money you're losing money I mean without a system and strategy in place that can be very very hectic but confidence can be great for that and help you know help you avoid you know the panic inside your head but in order to get this confidence a great way to do it is not to make money because if you're just trying to make money out of the gates to build confidence you're going to lose money because you need to you know I have a fine-tuned strategy you need to understand how your risk management systems play out but in order to do that you gotta you know you got to test things out but you don't have to test things out with real money you can test them out in a risk-free manner and that's paper trading so what I want to do now is go to my screen top and show you a spreadsheet that I use and then how you can implement it as you're trying to gain confidence as a trader fine-tune your strategies and of course it's all risk-free welcome to my desktop here is the spreadsheet that we're going to go over but the main theme here that I want to get across is making our lives difficult why are we trying to make our lives difficult well real trading is already hard enough you have your money on the line emotions start to creep in things are just different any way you slice it things are always going to be different from paper trading to actual trading and our goal is let's try to make let's try to make it as smooth as a transition as possible and the best way to do that is to make our lives as difficult as possible on paper when we're doing this the problem I have with the virtual trading and you know just kind of the way a lot of people do the paper trading even if they're using you know the old-school method of a note you know pen and paper they make their lives too easy they make too many assumptions in their favor this spreadsheet is designed to totally flip that around we are making everything against us and if we can show profits with this sort of system then you know that just increases our likelihood that okay when we do actually get in a real trading our odds of success should go up that much more now it's still not going to be a flawless totally perfect transact or transition because real trading is going to be different but the people people that make their lives too easy during paper trading they just have way too hard of a time when you get into actual trading because all of a sudden all these assumptions that they were making are no longer coming true so we're going to flip that around and make our lives difficult so what I want to focus on here is reality and then paper trade so there's two key colors here orange gold whatever you want to call that and then green one of them is what we want so we're looking at a chart setup let's say and we say you know what if this was a real thing if this was reality I would I would want to get in at a certain point but in order to get in at that certain point another price needs to be hit so we'll get into that more as we go through the sheet but just know that two things are going on here there's reality what we would actually do but then what we need to happen from the perspective of our spreadsheet here and paper trading so just starting up here first point is the data you only type in the areas with the light blue so if you don't see light blue don't touch it don't type in it so the date will just say here's the date and then the stock XYZ I know these two things seem simple but again we're trying to figure out a strategy we're trying to fine-tune something we're trying to just build confidence and these little simple details like date and stock really go a long way because when you're you know what we're doing here is also building the trading journal so when you're going back through the trading journal in your spreadsheet you're saying now well at what point time was all this trade what was I thinking here well if you have the date up there it's a lot easier to go back to that point in the chart and you know relook at things so simple details oftentimes make you know the biggest biggest difference so get those simple details up there now here we get to reality and paper trading so actually let's take a step back over here you have your commissions so if you are trading stocks you know your will just go with one of these ridiculous ones that you know know per trade now if your options trader that would be where you put your base fee and you know some stock trigger stockbrokers offer the per share Commission so that's where you would put that so that number to obviously be zero then you just have per share and then for again option traders this would be your per contract fee so for whatever you're paying per contract so we got our fees in order and I do want to at least start the soft notice what happens immediately we always start off in the hole there is the first thing that you have to realize is the way the spread shot you can see it's already calculating as soon as we buy in we're in the hole because right on the buy we have that Commission so if your Commission's are at $you're in the hole $right off the get-go so there's a the first little example of do your research on brokers find somebody that's cheap because the lower you can get that number down the lower you're going to start off in the hole so keep that in mind that's because that's the reality of the situation right there 999 our loss right off the bat we are you know starting behind because of Commission's now there's no way around that commissions are just part of the game but let that serve as a motivation to really go out there and figure out you know broker that offers friendly Commission so get into the spreadsheet here now reality and paper trading so we're looking at a chart we're looking at a set button so you know what based off this system or strategy I would get in at that point so let's just say that point is ten dollars and five cents now in order for you to allow yourself to say okay I got in at the price has to hit ten now why are we doing that well this is where things get too distorted where people are too quote/unquote nice to themselves and make too many favorable assumptions no in reality the price may go down there and just tap 1005 for maybe like 50 shares but then people say okay I got all my shares when if this was the real thing maybe you would have gotten a partial fill maybe you wouldn't have gotten anything at all but by by allowing it to drop below that okay it's a pretty safe assumption that if you wanted it in at 1005 and the share price actually went down to $10 then yeah I think you would have probably gotten in perfect so yes there is a first distinction there in order for you know you to be considered in and in order for the spreadsheet to consider that you're in the price needs to hit $10 now all the calculations are being based off a 1005 they're not being based off of $10 let me say that in all the calculation on the spreadsheet are being based off an entry point of 1005 not ten dollars but the price has to hit ten dollars in order for you to be considered in do you see how that's turned against us may say all that I don't like this that that's too deadly that that why are you tilting things against us like that exactly we got to make our lives difficult so the question becomes do you get filled or not if you did click one if you don't click zero so in this case we'll say that yeah you do get in so now you're into the into the trade well how many shares are you in for this let's just say we're in for five hundred shares so now you can see over here this auto-populates we have 500 shares left you know in our trade so back here or on the date here let's just say on the same day you're saying you know what based off of what my chart set up a scene I would like to you know sell some shares I'd like to lock in some profits at let's just say ten dollars and 20 cents now in order for you to be able to say again over here is filled so in order for you to say yes I got filled I was able to sell shares the price is going to have to hit ten twenty three again do you notice how we're making our lives difficult in order to say that we sold for profit the price actually needs to hit ten dollars and 23 cents again in order to sell in order for the spreadsheet to be able to say yeah you sold at ten twenty the price when you're watching the action actually needs to have hit 10 dollars and 23 cents but we're only getting credited for ten dollars and 20 cents again the virtual trading stuff if it just taps ten twenty and it could maybe maybe there's literally like ten shares that are sold there it would automatically say okay up you're sold yep you're all out that that's not how it works you may not have gotten out of any shares there so we need to make sure that it actually goes beyond where you'd want to sell to insure that okay yeah you probably would have definitely gotten in sold at ten dollars and twenty cents if the price actually went up to ten dollars and 23 cents so your reality you know what you want what you would want to do at ten twenty price needs to hit ten twenty three so in order to say you got filled as long as if the price does go up there and hit ten twenty three or ten two for now what number should you use what kind of fudge factor you know that's up to you obviously if your if you go 1040 you know that's making life way too difficult that's unrealistic you know for you know it's going to vary you know if you're talking about a $300 stock then yeah 25 30 40 cents makes sense but when we talk about a $10 stock you know a few cents that's all you need to do you know if you're talking about a stock that's a buck 50 you really a penny a couple pennies is going to do but for you know a ten dollar stock that's way too much but you know 10 23 1024 you know 10 25 I'd size probably even a little bit too much on to but it point is it needs to be up now 1021 and that's that's a little too easy you know 1022 okay that's fine but for me I think 10 23 is a good little sweet spot there so if the price does hit 10 23 all right you are in now how many shares let's just say you're at that point you're looking to sell 200 shares at that point you are now at 20 you made twenty dollars and one cent on that transaction now down here you're thinking wait I just made 20 bucks how am ia up $10 well remember we have these Commission's that are being factored in so at least you're out of the hole now but that's why you know the commissions there are going to add up now let's say maybe this is a swing trade so you're looking to sell the next day and you want to next exit point you want to be at let's just say 1037 well remember the price needs to go up beyond that so in order to say that we actually did sell at we're going to need the price that hit again let's make our lives difficult but let's say in this situation nope you didn't get fill or and at this point we're looking to sell just 100 shares at that at time you know we have 300 left we want to sell another 100 but at this point time let's say nope it didn't get quite get filled so you type that in you know nothing happened that's just telling the spreadsheet okay you didn't make any gains or losses because just simply nothing happened but over here is very important maybe I got knocked down by you know the 50 SMA on five minutes I don't know I'm just totally making this out maybe that will help you out but point being take advantage remember trying to do a trading journal and you know keep in mind about you know what's going on and what sort of notes you you kind of notice about maybe why didn't get filled you know was it close was it not even close did something knock it down before the price got there I'm just knocked on your earth not write down your observations and that way when you go back to it again you can go back on the date look at the chart and then see what was in your mind a common pitfall especially for me is I'll remember and then you know five minutes later wait what how was it what and then it's amazing how quick your mind can forget stuff so write stuff down notes comments thoughts all that stuff use this area over here it can be very helpful so let's say another day goes die goes by and you're thinking all right you know I want to revise this down let's say I just want to try to get out at to at this point so again we got to make our eyes difficult well in order to get out at we actually need the price to hit and in this case we're still looking to sell those hundred shares and yeah this time it does work out so they're made some money they're made $17 you can see where our gains are at again they're not going to be you know corresponding exactly because we have those Commission's that are being factored in here so again let's say and keep in mind we now have 200 shares left hopefully that makes sense we sold 200 here we tried to sell hundred there but remember we did not get filled then we tried again for 100 we did get filled that's why we typed one so you know 200 plus 100 is 300 and you know obviously after take that out of 500 hopefully we can follow that math we have 200 shares left and then let's just say the next day we get we want to sell at so in order to do that while the price actually need to hit 1053 and we do get filled there and this is for another hundred shares so there we go make some more money on that we're up to 62 dollars on the trade and then finally the next day we'll say we get I at this point you have you should have a stop loss in if you're running and testing a strategy that doesn't have a stop loss then you have a severe problem you better have a stop loss and so let's say eventually at some point it's moving up but you want it you just you don't want to just sell for the sake of selling you want to stopped out so he eventually let's just say you end up getting out at 1062 so that was your exit exit now why are these both the same well it's a stoploss you know what that is so if it gets hit then you're out so at that level it is what it is at that point the price drops back down and hits it you're out and that would have just been for your final hundred shares so there is what you made you have zero shares left and I at this point you know hit my trailing stop loss which was put at I don't have a 1% of the current price and who knows that might not make any sense point pain take some notes ok what why did you finally get out well it hit your stop-loss or trailing stop or whatever and you're out so there's your gain and that does factoring commissions let's just tie this let's say you can get this down to 695 so 109 oh 5 what would make what would be the difference of notice how much your gains went up not a whole lot but you do this over and over and over again throughout the course of a week a month a year it's amazing how much you know even just a three dollar difference could make now a couple other notes if you are doing options then you know the numbers that show up in this column just remember them you can just multiply that kind of in your head by a hundred and that's the actual amount you're making that's just you know standard option stuff there each contracts is 100 shares so just multiply that by hundred on no need to explain that if you're trading options you should understand the importance of that 100 number and then also down here if you are shorting if this number is negative that is a good thing because the way the math is working you will get negative numbers but when you're shorting negative numbers are good because that would imply that you're in the profit and the price is going downwards which is how you're making money you can see this here you know I just got so you could start all over again new date new stock if you do run out of room then you can always just take this copy it move it down and you're just going to want to right-click and then just do that first one paste it and then right here you have a whole new data set and then finally actually let me move the spreadsheet up some so you can see it no you can name these I don't know you could name them by a strategy you can name them by a date maybe you're trying the billy-bob strategy I don't know and I'm just totally making billy-bob strategy and then you could go and rename this one something else if you wanted to again there's nothing on this spreadsheet or on that tab but that's really just as easy as you know you coming over here copying coming over this one and then you can just again that first one right there have to readjust the columns a little bit but easiest way I do it is just you know use this one here but you can get us fancy with it as you want the main theme here that I'm trying to get across is making our lives difficult understanding that there is a difference and there needs to be a difference tilted against us from reality and actual paper trading so when you're buying price needs to actually go lower than what you would want to get in at when you're selling the price action needs to go higher than what you would actually want to sell at in order to get credit for the sell so if there are any other questions on this you know you can let me know but like I said we need to make our lives difficult the more difficult they get going into real trading the the higher likelihood we have of actually turning profit because I see time and time again I'm losing money you know I was making money when I was paper trading but then as soon as I go to real money I'm losing money maybe you can relate to this well my guess is it's because you made your life way way way too easy in the world of paper trading when it comes to all this sort of stuff so yes it's going to be more difficult to make money but that's just the point of it so keep that in mind so as I noted in the video you can click on the screen right now and that's going to take you to the place that you can find the spreadsheet and get that email to you you can also click down below if you're watching this on my site or YouTube and again that link will take you to other location where you can sign up to have this spreadsheet email to you and that way you can leverage things against you make your life a little bit more difficult but as I have said paper trading the pitfall the dangerous part about it is you know you can exaggerate things in your favor and that's the exact opposite of what we want to do because when you go with real money you know it's still not going to be the same as paper trading that's why we need to make paper trading as difficult as possible and that's what that spreadsheet is designed to do if you have any questions or comments please leave those down below if you enjoyed the video and find out you know videos like this and tools like this helpful you know please click the like button if you're watching this on youtube or click the share button if you're watching this on my site clay trader.com and you know I like to hear feedback on whether or not you know this is worth your time or if I'm just you know quite frankly wasting my time so feedback is definitely appreciated thanks for watching get out there be realistic in your paper trading and trade without emotion.Options Trading, Stock Trading, Penny Trading, Paper Trading, Learn to Trade, How To Paper Trade, Practice Trading, Trading Simulator, Free Paper Trading, Trading Systmes
Nice Blog..One can get good information about stock market & Trading tips.Thanks
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Long article, but thanks for sharing.
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ResponderExcluirHello Your article is very informative about paper trading , I was searching for it from many days where people can do trade in which no share trading or money transaction would happen. Thank You for Your information.
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