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Paper Day Trading Stocks

You are now ready to start paper trading. Paper trading is day trading with 'pretend' money , i.e. on paper, hence the name. When paper trading stocks or any other investment, a day trader should try to keep it as close to real life trading as possible.If you kid yourself, and are not ruthlessly honest with your paper trades, you might become overconfident, and then when you start day trading for real, you will be surprised that it all suddenly seems so much more difficult. If anything, your paper trades should be even more rigorous than your real trades. What I mean by this is that you should assume you will ALWAYS get a bad fill (suffer 'slippage' on the trade) both when putting th trade on, and when taking it off. Of course, it goes without saying that you should be paper trading EXACTLY the same system you intend to day trade for real, and using the same instruments (stocks, options, futures, whatever you have decided on).You must use the same day trading systems you intend to use for real for another reason too - during day trading, the 'intrabar' volatility can be frighteningly large. Many day traders get stopped out far faster in real life than they ever do on their paper trades, because they kid themselves 'it didn't really go that low/high'. You will also need access to live day trading market data while paper trading, as without it, you are simply fooling yourself. You need to paper trade for at least a month before you try trading with real money. You must also learn to 'short' the market (i.e. sell high and buy back lower). If you don't you will be missing out on half the day trading action each day. Many day traders never master the concept of shorting, but it really shouldn't cause any difficulty - it is simply the reverse of ordinary day trading. There are extra regulations regarding short selling, and your broker will alert you to these trading rules when you open an account. Alternatively, if you open a day trading spread betting account, you can short to your heart's content, with no extra regulation.

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