Paper Trading

#1
I was paper trading in moneybhai.com today and was trying to buy 50 shares of HUL. But, it said Insufficient volumes traded. What does this really mean?

There was a footnote which read as follows:
Your order will not be executed in the following cases
  • If the ordered quantity per stock is more than the actual traded quantity.
  • Only 10% of the corpus can be traded on per stock. Once that limit is reached your order will not be executed.

I didn't get it as the volume of HUL was 101,497 and i was not able to buy 50 shares :(
Can anyone tell me in layman's language what this means?:eek:
 

SwamiNathan

Well-Known Member
#2
Th biggest enemys of trading is greed and fear. You wont have those enemys in paper trading. So paper trading dont teach anything. Come live.
 
#3
Th biggest enemys of trading is greed and fear. You wont have those enemys in paper trading. So paper trading dont teach anything. Come live.
GREAT! Wish i had as much confidence as you:)
But, don't you think learning swimming in a swimming pool and then jumping into the sea would be better than directly jumping into the sea and getting yourself drowned:D
 

SwamiNathan

Well-Known Member
#4
Right! thats what I am telling. Learn in Swimming pool. Trade with less money. Dont read a book "How to Swim".
 

AW10

Well-Known Member
#5
Pilots don't jump in cockpit of a passenger plane on their training. Will u board that plane where pilot is trainee..
they go thru rigerous simulated training, then low risk filight training undersupervision before they are given certificate to become pilot.

Paper trading has its advantage (specially if it is done manually), It trains your eyes, brain, helps you internalise your rules.. etc... It gives u confidence cause u know what to expect in real trading.

Ofcourse, it doesn't give u practice on psychology but u can trade with small lot while getting addressing the psychology issue. But I don't think, u need to put your real money (however small it is), to test your buy/sell signal to find out that your dream system is with -ive expectacncy.

So Understand the limitation of what you are doing.

Happy Trading
 

bunny

Well-Known Member
#7
In the process of learning, everything cannot be taught at the same time. Somethings have to be given the back seat and touched upon later.


I would rather say first do paper trading and when you feel comfortable, come live with a self-earned 8-10 thousand rupees. It is very important to have self-earned money because only then you will know how it pinches to make a mistake. This will make you a better trader over the time. If you use your parents money which you would not return, it will not pain to loose money. Hence, any amount of loss would not have any effect on you and you may continue to loose.

Now, when coming live, fear and greed can(and will) play havoc in the few initial weeks. You will experience unpleasant emotional extremes on every uptick or downtick. Inspite of analysis, it can make you enter or exit at incorrect times. Sometimes, your analysis will also "blind" you and prevent you from seeing the reality. This may go to an extent that you will start believing that every move which is opposite to the expected one is a trap move or a false move. This could trap you deeper into a poor trading position.
 

tvrssvk

Active Member
#8
Re: Paper Trading---help me in target price and SL price

Hi all Seniors,

I am paper trading around 5 scripts.
for example:
CALL : Buy(swing trade----2-10 days)
SCRIPT : vESUVIUS
@ : 175.50
QUANTITY :15
STOP LOSS :136.50
IST TARGET : 214.50
METHOD :20,000(3% RISK)
DATE OF PURCHASE : 04/09/2009

Omitted brokerage to make it simple

selected stocks based on 2-4 days pullback, mimicing markets, with the help of MA,MACD.

Now my question is

My trading time frame was 2-10 days, however, the script has not touched or even came close to my TARGET or STOP LOSS. Taget and stop loss was calculated using 2*ATR. Is it to high. Initially I was using 3*ATR which had huge difference and would run to months. Hence changed it to 2*ATR. Now the same problem,

What should I do. Get out of the trade after 10 days and look for new scripts orelse continue with the holdings till it acheives stop loss or target......
 

AW10

Well-Known Member
#10
Re: Paper Trading---help me in target price and SL price

Hi all Seniors,

I am paper trading around 5 scripts.
for example:
CALL : Buy(swing trade----2-10 days)
SCRIPT : vESUVIUS
@ : 175.50
QUANTITY :15
STOP LOSS :136.50
IST TARGET : 214.50
METHOD :20,000(3% RISK)
DATE OF PURCHASE : 04/09/2009

Omitted brokerage to make it simple

selected stocks based on 2-4 days pullback, mimicing markets, with the help of MA,MACD.

Now my question is

My trading time frame was 2-10 days, however, the script has not touched or even came close to my TARGET or STOP LOSS. Taget and stop loss was calculated using 2*ATR. Is it to high. Initially I was using 3*ATR which had huge difference and would run to months. Hence changed it to 2*ATR. Now the same problem,

What should I do. Get out of the trade after 10 days and look for new scripts orelse continue with the holdings till it acheives stop loss or target......
tvrssvk, Do u know, by how many ATRs VESUVIUS stocks moves in 2 to 15 days timeframe (or take a mid point and say in 7 days timeframe)?
Do some data crunching on historical data and findout the average distance travelled by
your scrip in your trade timeframe.

And use that number to decide your target. IMO, Randomly picking a number as 2 or 3 has no logic behind it. With right approach, probably u will find that 1.5 ATR is lot better target.

Another observation on above trade, risk on trade = 175-136 = 39 rs.
potential profit = 214 - 175= 39 Rs.
i.e. reward to Risk ratio is 1. In other words, you are risking 1 rs to make 1 rs. Does this make sense ?

Hope you know how to read support/resistence levels on the chart (atleast using pivot high/low approach), so my suggestion will be use those levels to decide target/stops rather then using a calculated number.

Happy Trading.