Author: Chris Hood
Be sure to check out new episodes of my video podcast each week, where my ace pupil Brian Jones and I talk the ins and outs of options trading- and give you insights and strategy that you can immediately put to work for you in the markets.
So you’ve decided to take a short break from trading.
Maybe you just don’t like the uncertainty and volatility of the season. Or you could be trying to get your head straight after a series of losses has cut the knees from your confidence.
Believe me, I know trading isn’t a walk in the park.
What I’m going to tell you will keep you moving forward even if you don’t believe in yourself.
Stay in the game by paper trading so that you never stop improving your skills. You can’t get better by hiding from your problems.
Consider this for a moment.
You’re a jiu-jitsu competitor, and you’ve done terribly in your past five tournaments. You’ve been choked, arm locked, beaten on points, and feel like you ought to just give up.
The moment you stop going to practice and hang up your belt, you’re finished.
Whatever psychological or technical issues are holding you back are definitely not going to get any better. Even worse, every day you spend away from practice will put more distance between you and winning gold.
It’s a downward spiral.
Your timing, technique, and fitness will quickly evaporate.
Breaking through your plateau and getting your mojo back can be as simple as taking some time off from competition and just working your weak points with your teammates at the academy.
If live trading is akin to competition, then think of paper trading as drilling.
To get better, you must keep practicing. And if the market conditions aren’t favorable, or you just don’t have the stomach to take another actual loss, switch over to the simulator.
You’ll still be getting your reps in.
Building a watchlist, setting alerts, and identifying strong setups don’t require any risk at all if you choose this route.
I advise all my subscribers to paper trade not just when they first start but continuously throughout their careers.
If you’ve got your long calls and bull call spreads dialed in but still struggle with bull put spreads or butterflies, then trade the former with real cash and the latter with paper.
Professional traders do this regularly — me included.
I just can’t stress enough how important it is to stay active.
We’re all going to occasionally have strings of losers. In a game of probabilities, it’s not just likely; it’s inevitable.
Sometimes we need that little boost in our confidence to dive back into the market.
And when we’re developing new strategies or learning more complex trades, there’s nothing wrong with using training wheels, so we don’t crash and burn.
To be honest, I paper trade more often now – after 20 years in the business – than I ever did as a beginner.
Anytime I create new indicators or rule sets, I use paper first. This is how I built my current day trading system that often earns me $2,000.00 a day or more.
I wanted some convincing data before I went live.
The key is to stay in the game.
Even if you’re not playing for real money, it’s going to make you more confident, consistent, and profitable.
And if that isn’t what you’re after, I’m not even sure why you’re trading.
No one can make you do this but you.
But take the advice of a professional trader and coach. Keep going, never give up, and improve whenever and however you can.
With 38 shocking triple-digit wins in the last 11 months…
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