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Warrior Trading Blog

The Importance of Paper Trading


The Importance of Paper Trading

In our live trading courses we put our students on a 3 step trading plan and meet with them twice a week to review their progress.  It’s extremely important that students trade in a simulated and closely monitored environment during their first months of trading.  We want to see the mistakes our students are making so we can quickly address and correct bad habits.  All students make mistakes learning to trade.  That is part of the learning process.  We have them trading in a simulated environment so their inevitable losses and beginner mistakes don’t come with a price tag attached.  During the first few months of trading some students will also realize that the level of risk involved in trading isn’t suitable for them.  We encourage an honest reflection of your experience as a trader.  Day trading is high stress and dealing with financial loss on a nearly daily basis is not for everyone.

The ability to day trade as your primary source of income is not a skill that is learned overnight.  It takes thousands of hours of practice, training, and studying.  Like almost any other profession, mastery comes with time.  The challenge for many students is that they make mistakes in their first few months of trading, blow up their accounts, and give up before they ever really had a chance to succeed.  The failure to manage risk and the tendency to live trade unproven strategy results in career ending blow ups.  We want to prevent our students from having that painful experience.  It will be rare to find a professional trader who doesn’t have a horror story of big losses and big mistakes, we all have them.  The difference between traders that give up and those that keep on fighting through is often a matter of financial resources.

Our goal is for you to trade in a simulated environment until you have proven you can be profitable.  By the end of our trading plan you will have refined your strategies and developed a sense of emotional composure to allow you to trade through the ups and downs without losing focus.

It’s important to set realistic expectations before you start your trading plan.  Expect that in your first 6 months you are unlikely to produce substantial profits.  Instead, you are taking the steps necessary to build a foundation for your future growth as a trader.  Many traders will try to skip steps and end up making mistakes that will jeopardize their ability to continue trading.  Every single trade you take will give you a little bit more experience and a better understanding of the market.  For that reason, the longer you are able to survive in the market breaking even or making small profits, the greater your odds for success.   You have to survive until your thrive.