This headline is kind of “doh” because of course you will save money because you cannot lose money with a simulator. But we are not talking about using a simulator forever but when you start your Day Trading career as it is highly recommended. Why begin your day trading career with real money without first trying if it works with fake money first? Because if you cannot make it work on a simulator then you cannot make it work when day trading live. This is the single most important piece of advice I give to new day traders.
A Simulator Is Also A Great Tool For Experienced Day Traders
It is not only new day traders that should use a simulator. Whenever an experienced trader tries out a new strategy there is no reason to try it out with real money until it’s been tested on a simulator. It doesn’t matter how rich or successful you are. Trying a new strategy out without first testing it on a simulator is just a big waste of money.
Hopefully you have or will use a simulator from now one but there are still a few things to keep in mind. Just because you are profitable on a simulator does not mean you will be profitable trading real money. The move from a simulator to real money is a huge step in your day trading career. There are a lot of emotions coming into play when day trading for real money. The most important and dangerous ones are fear and greed. I have met more traders failing at day trading due to those 2 emotions than for any other reason. So start real money day trading with the minimum of positions as possible so you minimize the fear and greed emotion. Read our section on Trading Psychology if you want to learn more about how to control your Fear and Greed emotions.
For more tips check out my free videos on Day Trading
In the next post we will talk about how to become profitable day trading. So be sure to come back and read that post. Good luck day trading.