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Thursday, March 20, 2008

Question: What About Papertrading?

Challenge Accounts:

Investing Account Balance: $201.46

Stock / Futures Trading Balance: $684.39
Online Savings Balance: $12.07

Personal Trading Thoughts: Cash. No positions. Short - bearish outlook to sell rallies in stock market, but extremely wary as this market remains very volatile. Looking only for long positions in the Commodity Futures arena.

Personal Investing Thoughts: Cash. Bearish outlook for the market. Expecting, by the time this has played out? For 35% drawdown from highs for this bear market. Personal ideas? Open Swiss Bank Account with $10,000.00 USD, and start diversifying into foreign currencies. 1) Yen 2) Swiss Franc 3) U.S. Dollar 4) Euro and 5) Chinese Hyuan. I have to update my Passport I guess.

I'm going to start answering some of the questions that have been thrown my way lately.

One of which is: What about Papertrading? Well . . . . I believe if you are serious about getting involved in the markets you should papertrade. But you should understand there are aspects of trading real money that can never be reflected with papertrading. When a trade starts moving against you? It's much easier to dump out of a papertrade and take the loss, than it is with real money. With real money, your mind reels at the thought of taking the loss.

Some good online sites that simulates a hypothetical portfolio can be found here at Investopedia, as well as here at Virtual Investor.

* * *

Investing Account Balance: $201.46
Stock / Futures Trading Balance: $684.39
Online Savings Balance: $12.07

Total Trades and Investments: 3
Largest Inter-trade Drawdown: $86.51
Consecutive Losing Trades (Drawdown): 2
Average Drawdown: $82.56
Average Loss: $82.56
Accuracy Rate: 33%
Average Reward: $179.75
Risk : Reward Ratio: 1 : 2.02

This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 12 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research and tolerance for risk.

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