If you want to get your first annual trade report then trade in a demo account. This is the ultimate tool for growing your first annual report. How does the old saying go?..."If you want to get the things others do not have, you have to be willing to do the things that others will not do. Trading in a demo account for an entire year, with one trade model, will instantly put you in that elite category of doing what others will not do". The pros are numerous while the cons are few if any. Let's do a quick break down of why it is a great idea to use a demo account for acquiring your first annual trade report.
1) No Monetary Risk.
Why would you risk your hard earned dollar on a trade model that you have not tested extensively in a demo account? This makes absolute zero sense to me. It is okay to copy any trade model that you like but you MUST trade this model in a demo account for an entire year to get a good look at what the model is capable of doing throughout the years flow of institutional monies (Volatility). You will need deep wells of confidence in your trade model when you do put real money on the line. Trading in a demo account for an entire year will give you that confidence (provided your trade model is any good...we will get to that later).
If you have ever trained at anything in your life, even a job can work in this analogy, then you know what it is like to out work your opponent or co-worker. The harder you work at a particular skill, the more confident you become. Trading is no different. Think about six months into the year, you are on pace for a 70% annual return for the year. You have taken maybe a hundred trades or more during this process. Think about the level of confidence you will now have. The simple fact that you know, you are doing something nobody else is doing and you are doing it at a high level.
This will change you as a trader. I know because it is exactly what happened to me. Checkout my last three years of trading here. I have a detailed report for 2019 that you can download here. This is a 25 page Detailed Transaction Report from Thinkorswim. The report shows hundreds of trades taken along with images to corroborate. I have been trading the exact same trade model for four years now. This has instilled a ridiculous amount of confidence in my model. I continue to test different markets in demo accounts as evident by my twitter post about the Bus Ticket Theory Genius here. I am a huge fan and avid supporter of demo trading.
2) No Psychological pressure when drawing down.
Now, I know what you are thinking, psychological pressure and drawdown is what trading is all about. Yes, you are absolutely correct. That is the reason you must not have any when you are developing your confidence in a new trade model. Your mental psyche will be what carries you through the year. If you are drawing down with real money and you have never seen your trade model in a years performance, you will most likely panic and run for the hills when drawing down i.e. stop yourself out and take a big loss or even worse, quit the trade model all together. Either way you are in deep waters when drawing down so your psyche abilities must be working on all cylinders. If you are not confident you will begin to flip flop, trying every trade model you can find, desperate to show a profit. This is the rat wheel where many traders go to die. Don't be the next victim of this vicious cycle. Handle those draw downs with ease when trading in a simulation account.
1) This takes time.
This is probably the number one cause for traders not having an annual trade report. It simply takes too much time to develop. We live in a world of "I want it now" type of mentality. I understand you want results and you want them now but I implore you to re-think that strategy when working with financial markets. I say it all the time, "trading is a marathon not a sprint". If you want to become a consistent trader for a long period of time you will need proper risk on training. Trading in a demo account for an entire year will provide you with the proper risk on training needed to succeed in this very tough business.
Earn your live trading account through hard work and dedication to proper "Risk On" training.
I can not think of another negative to trading in a demo account. Please feel free to comment below if you can think of something to add, as I encourage a healthy debate.
That is all I have for today. I hope this article was helpful. Please contact me here if you would like to discuss more on how to become a profitable trader or simply to figure out how you can get your first annual trade report.
Great trading everyone,