Friday, 9 September 2011

Transition to Live

Becoming CP has a last step: the transition from SIM to real money trading. This is not always an easy transition. It's not a trading issue but purely a psychological issue.

People who have more capital seem to cope with it more easily. The fear of loss is greater if your trading account is smaller and you trade a larger contract. If you read this blog from it's earliest days, you will see a number of posts talking about this problem. 

Transitioning from SIM to live should be done trading the smallest size and with the most modest expectations.

Trading SIM allows you to perfect your trading skills without risking any money. It develops that muscle memory. When you add all the backtesting that I have suggested, it makes you a believer in your methodology. It makes you believe in your skills when you see your weekly stats as a consistent and satisfactory set of numbers.

Transition to live should just be the addition of one variable: changing the account number of your execution app from your SIM account to your live account. Everything else should be the same. By the time you are ready to take that last step, you should be able to carry out the two steps of instant trade recognition and instant trade execution, in your sleep, without any real thought as your muscle memory should be taking over. 

Until you reach that level, CP in SIM and instant trade recognition and execution, you are not ready for live trading.

This was our last day in Hungary. We were at Lake Balaton today, the Gold Coast for the Hungarians. Summer is over now and things had wound down. Back to France tomorrow for Mrs EL and me and back to London for the rest of the clan.

I'm looking forward to going back to work on Sunday.

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