Indiana Grain Company, LLC

Posted: 01/26/10

By: tomgrisafi

Ask any professional trader how they became successful, and the answers generally always remain the same.

Discipline and Good Habits.

Prior to making the plunge into the markets, many traders start out paper trading or on simulators. Many also fail to take into consideration the bad habits developed during paper trading that can follow an investor into the real market, which can also lead to potential losses.

Trading on a simulator will not condition a trader mentally as it is "play money" they are trading with, and they can afford to lose an unlimited amount of money.

Using real money, even if a very small amount, conditions a trader mentally. Taking this route helps a trader be more cautious and build proper discipline.

Perhaps the greatest advantage to this theory is traders build up a tolerance to losing money. Now of course losing is never the goal, but unfortunately it is inevitable. And on the flip side, when starting out and trading successfully, trading with real money builds up confidence quickly.

I have said many times on the Indiana Grain trading floor that "We are Trading, not Hoping". I can't help but feel people starting out on simulators are simply "hoping" for something to happen.