How to Swing Trade Summary (C15): Final Thoughts

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You can read all the books you want.

It won’t make you a good trader.

Only practice will. And I can almost guarantee you that you will make costly mistakes when first starting.

Fortunately, you don’t have to risk your hard-earned money to build up experience.

Paper trading is essentially trading but with fake money.

It is great not only to build up your skills, but also to serve as a way to test and refine any new strategies you come up with.

Many brokerages offer paper trading accounts, including eToro and Interactive Brokers.

You can open a paper account and trade in exactly the same way you would with a live account. You will scan trades, look at the charts, and enter positions, set stop losses… everything.

When you do paper trading, keep everything as realistic as possible. If you have the option, set your opening balance to what your real opening balance would be. Follow your trading strategy and risk-reward plan exactly as you have written them out. Keep to your trading schedule and fill out your trading journal.

It is suggested that you paper trade for at least a couple of months before you risk real money.

One thing paper trading cannot fully simulate is the emotion that comes with using real money.

Many trades will not go your way and you will be tempted to hold onto losing positions to break even. Or perhaps you will let a winning trade ride so you can make more profit, only for the stock to plummet overnight.

It is your emotions that will cause you to stray from your plan.

While not perfect, paper trading can help you build up the discipline to avoid this.

Read the first chapter of Swing Trading Using the 4-hour Chart here.

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