[cosmo]

I am wondering if it is worthwhile to paper trade or just to jump on in ? Is paper trading a waste of time as the trader doesn't feel any real pain and so the lessons aren't meaningful. Is paper trading a prudent way to get inexpensive lessons. I'm not sure if seeing if I can make money on paper first is a good idea or a waste of time ? Comments appreciated.

[Fletch]

Cosmo
I have read "experts" who advocate paper trading; and I have read "experts" that think it is useless, because, as you say, you don't feel the pleasure or pain.

I have been trading for over a year. I paper traded for a short time, but nothing was like the real thing. I don't know whether my experience fits other people, but I kept my position sizes pretty small, and made a big deal out of setting logical stop losses (I use a number of strategies)

What has really saved my bacon is:

a) Always determine a logical (minor low) stop loss price before making a trade, and if the stock looks like might run away, place a limit order to make sure a gap up doesn't increase your downside more than you plan.
b) Don't trade within a couple of weeks of an earnings announcement. I use earningswhispers.com for this.
c) Plan how to trail your stops and how to exit before you buy, or immediately after. I am not good at this yet, and have lots and lots of questions to get answered.

The times I didn't place a stop loss after a trade were the times the market seemed to know that, and took my money. It has taken me months to get to a point where my error rate is very low. Every couple of days I list my open orders from the broker (Schwab) and check that all my positions have stops in. I am getting anal. That is a good thing.

My biggest problem ... on the days when the market is going South, I "don't have time" to look at my watch list. Then when the market perks up, I take a look and see all the wonderful buys from two days ago.

Fletch