This is the 21st century...
the age of computer games...
the age of simulation trading.
Our investing ancestors such as Richard Wyckoff advocated that newcomers to the investing world should devote a significant amount of time to what was once called 'paper trading'.
My task in this article is to strongly reiterate the wisdom of Mr.
Wyckoff's advice.
With the advent of computer networks and cheap PCs, the ancient practice of 'paper trading' is alas on its way out.
Don't worry though, its place has been subsumed by a worthy heir - simulation trading.
As the name suggests, this involves placing trades with a simulator as opposed to a real broker and exchange.
'Paper trading', simulation trading, or whatever else you choose to call it allow you to practice the science and art of trading without putting your hard earned money at risk.
You can make all your mistakes on a simulator, as well as monitor your performance.
Over time, as you identify and correct your mistakes, your performance should show consistent improvement.
As your improvement continues, and you eventually become profitable with the simulator, the next stage would be to trade a real account using real money.
But caution is still advised at this stage, too.
Real trading is very different from trading with a simulator, and new lessons need to be learnt, and of course new mistakes will be made.
These mistakes will also need to be ironed out, before I would suggest you invest with real money.
The best thing to do is to trade with 10% of your capital for a number of months, and monitor your performance.
If your performance matches or betters the (profitable) performance you had with simulation trading, you can then graduate to trading with your full account.
You could do this in phases if you want to.
So you could step up to 25% of capital, then 50%, 75% and then finally 100%.
There is no rush.
If however, your performance when trading with 10% of your capital is significantly worse than your performance with the simulator, my advice would be to return to the simulator.
Try to identify and correct the mistakes you made in real trading.
When you become profitable again, repeat the step(s) in the last paragraph till you reach full investment.
If you stick to this tried and tested practice of simulation trading you will well ahead of your competition.
I say this from personal experience.