Actually for new traders, or especially if you do not have a lot of capital yet, paper trading is one of the best place to start training yourself. Okay? Train your workflow and to learn how to make all the mistakes first without incurring all the losses. 

And then, as you start to paper trade and you track your paper trades and generate a series of 30 trades, 50 trades, and look at, “What is your R-Multiples profile?” “What is your net R-Multiples?” “What is your expectancy?” Then before you even reach your first dollar, you will have a pretty good idea whether your system is even profitable or not. And I think that will be a good base to start off.

And then once you realize that after you’ve done 30 trades, 50 trades of paper trading, you have a positive expectancy, you have a positive net R-Multiples, then that’s when you start to put your money, and that’s where, of course psychology comes into the picture because real money at risk will always cause different kinds of biases and psychology issues into it. And that is when you are already very familiar with the workflow. You are very familiar with your strategy, you are very familiar with other things. Now you have the capacity to deal with the psychology, and the capacity to deal with real money. Alright?

So, one thing at a time, one stage at a time, it’ll be easier to handle rather than you straightaway start to trade real money, and then you’ve got to deal with your psychology. You’ve got to deal with real money, and you’ve still got to deal with the fact that you are not familiar with your workflow yet.

You are not familiar with your strategy yet. You are not familiar with where to take a stop loss, when to take the profit and stuff like that. So, you end up being totally confused. And that’s how people actually make very cardinal mistakes, huge losses, and they give up after that because they felt overwhelmed because they try to do too many things at the same time.

Interested to receive mentorship opportunities like this with Philip?

Find out more at traderwave.com/innercircle

Philip Teo

Founder & CEO at Traderwave Pte Ltd
Philip Teo is an entrepreneur, speaker and trading coach who specialises in the field of Technical Analysis of the financial markets. He is currently the Founder and CEO of Traderwave Pte Ltd, a financial technology company that offers a web charting application to global traders. He has conducted many trading seminars and appeared on national television before. He is also currently an official speaker and trainer with SGX Academy. Learn more about him at his Google+ Profile, LinkedIn Profile and Facebook Profile

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