Simulator to a Small Account

[Lexie 3]

I am trying to sim trade with what my startup account will actually be $5,000 and am wondering what others did for sim trading and then their actual live account.

For those of you who began with a lower end amount of money did you sim trade with that much or more?

2%= $100   Thats the most I can risk per day. What about comissions/fees per trade? Did you pretend to pay that too?

In most trades Ill only be able to buy 2-4 shares... Does this sound correct?

Would love to hear what you all did and how you are setting up in sim and real life

[Rob C 826]

Hi Destiny,

2% should be your risk per trade. This is what you will be risking if you stick to your stop out price. So let's say you take a 5min ORB on a stock that costs $50. Let us say that VWAP is the closest tech level and you use that as your stop out point. VWAP is 25 cents from your planned entry. So you plan on risking 25c per share on this trade. You are risking $100 on the trade, thus you take $100/$0.25=400 shares. Now I use that example to show that $100 is a lot of risk. At $50 a share price, that is a $20,000 trade and 67% of you buying power (assuming CMEG). I have been trading live for 5 months and I have worked my way up to $36 risk per trade. So maybe 1% risk per trade may be better. $100 would scare the heck out of me.

Many traders prefer using share size and start with 100 shares. I really like basing the share size on the risk I am willing to take. So I don't have my nerves swing from low to high on an expensive stock. Others choose % buying power and have DAS calculate the share size. But again I like the $ risk constant, it helps my nerves and forces me to have the exact stop out price before I take the trade. DAS will calculate the share size for you. I just click the button on my layout with the $ distance from my planned entry to my predetermined stop out and it already knows my $ risk per trade and thus instantly calculates the share size.

I hope this helps.

Edited April 9, 2019 by Rob C

[Lexie 3]

Hi Rob! Thank you!!! That helps a ot to understand the basic calculation of risk per trade and per share.

Could you explain your last few sentences where you click the button on your layout... where it calculates for you? I dont know where to find that.

 

Thanks again,

[Rob C 826]

Your welcome.

I think the best thing about DAS is the hot keys or hot buttons can be scripted. To help reduce hotkey mistakes I use hot buttons now, but it doesn't matter with the script. You can create as many hot buttons as you need.

So I measure the dollar difference between the planned entry price and the the planned stop out price, for this example lets say its 10c and then I click the button I have that has written in big bold letters "Buy 10c". The script for that button is:

Share=360;Price=Ask+.05;TIF=DAY+;BUY=Send;

Every month I increase my risk (if I had a month that I was disciplined enough) and this month is $36/trade. So my 10c risk is scripted to buy 360 shares. And thus my 15c button is scripted for 240 shares. I have a lot of buttons, some in the dollars (I do trade TSLA sometimes), so you may want to use hot keys. Mine are labeled and color coded so it works well with me. 

[Lexie 3]

This is great. I’m making practice calculations so I can be aware of cost per share and how many shares to buy based on practice charts. 

This is incredibly helpful.

Im going to set it up so I begin with $5000 and each day add or subtract from the day before.

 

i like how you are slowly increasing risk. 

[Gordon Freaman 10]

Hello @Destiny 

I have been in simulator for over 4 months now and preparing myself emotionally to go live and (hopefully) not loose my deposit. 

I am planning to run with CMEG group, as everyone should start at some point if small account needs to be build. I will deposit $2500 so that I can get 1:6 margin buying power from the broker ($15K in total).

While in sim, I have set up exactly $15K of buying power in DAS Trader platform and also asked DAS support to adjust commission fee to be $2.95 per trade (CMEG), otherwise by default I think commission fees are around $7 and buying power over $100K. I have set up the following schema for my trading:

1. Risk per trade is 0.5% of my deposit, and not the buying power. So it comes to $2500 * 0.05% = $12.5, but I try to be really strict to myself and only risk $10 per trade.
2. My risk per day is 2% of my deposit and not the buying power. So it comes to $50 a day, no more.

Discussing #1. Risk per trade is only $10, for me that means either I take 100 shares with 0.10 cents stop loss, or 50 shares with 0.20 cents stop loss (my stop losses are always mechanical and not mental) . At the beginning I 'd been always taken 100 shares with 0.10 cents stop loss, but noticed that for majority of trades I would stopped out (especially on stocks with >$1 ATR).

Discussing #2. Risk per day is only $50, and here I am also INCLUDING COMMISSION FEES, which means I can only do 3 unsuccessful  trades ($30 loss) plus around $18 commissions ($2.95 per trade * 6 trades =  $17.70). For me it's very important to include any commissions and any other additional fees (ECN) into my total daily loss. 

The most important point for me is to be as close to reality while trading in simulator. To be honest, the majority of days I'm red as tight stop losses prevent me from surviving pull backs...            

 

P.S. I never look at my P/L while trading, only after all trading is done (usually in the evening when I get back from day job).I look at the account report section, where it will show you exactly how much money you earn or lost. Hopefully that was a little informative for you 🙂 

Edited April 15, 2019 by Aznariy R

[Lexie 3]

@John Smith Thank you for explaining what you do! Im gonna go through it and see if this way of calculating fits. Its different than above but an interesting way to look at things. Thank you!!!