E-mini Trading: Are You A Dedicated Simulator Trader?

By Author: David Adams
Total Articles: 41
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There are a group of individual “traders” who trade for long periods of time on an e-mini trading simulator. I often come across these individuals in my trading room, and find they have been trading on a simulator for more than a year. Surprisingly, this group of individuals is far larger than I had ever imagined. Since the goal of most traders is to make money in their e-mini trading endeavors, why would a substantial group of traders choose to “pretend” trade for such a long period of time?

I have spent some time talking with these individuals and encourage them to start trading 1 contract so they get a feel for trading with real money. By and large, most of my encouragement is met with no action. Which is to say that the simulator traders stay on their simulators and do not begin trading 1 contract.

Why do some traders doggedly remain tied to a simulator?

I have given some thought to this question, and my conclusions are based on some investigation into this phenomenon and my own observations. Some of the reasons mentioned in the literature and confirmed through talking with simulator traders ...
... are:

• Fear of losing money
• Fear of failure
• Many simulator traders are traders who have “blown out” a futures trading account and are fearful of repeating their prior performance.
• Many traders are very uncomfortable trading real money, even though they trade profitably on their simulator. When the stakes get higher, like trading with real money, their trading technique and emotional trading outlook change.

I believe the number of pure simulator traders is still smaller than the number of new traders who charge into the market without training, but it is still a sizable number. Notice in the above bullet list there is one predominant word.

Fear and uncomfortable feelings.

The predominant motivators in intraday e-mini trading our fear and greed. These are powerful emotions. Like many things, some people obviously have a higher fear component in their personalities than others. This makes sense. For new traders, the first time trading with their own capital can lead to nervous and very stiff trading. With good reason, e-mini traders fear losses more with real money than on a simulator. After all, this is their hard-earned cash they are putting at risk with the expectation of a move that will be profitable. Not all trades are profitable, and the stark realization (on their first losing trade) that there are both winning and losing trades is a revelation. In short, a degree of failure is a component of trading in general, and e-mini trading specifically.

Many new traders are unprepared for their first losing trade, or their first losing day. In their minds, it's not supposed to happen that way. Good trade setups should result in profitable trades; that's the mindset of a new trader who has just completed a trading course that has promised untold profit. Of course, experienced traders realized that a losing trade is part and parcel of the e-mini trading business.

There is another group of traders who are going to trade on the simulator until they can trade perfectly. I don't trade perfectly, I don't plan to trade perfectly, and I don't know anyone who trades perfectly. Great traders tend to have the ability to identify high probability setups; but the ability to identify high probability setups in no way assures that the trade will be successful. The trade has a higher likelihood of being successful, but there is always a chance that it will fail. This is in a central concept to understand. Simulator traders who are looking to become perfect traders will be on the simulator for a long period of time.

In summary, I have theorized that most longtime simulator traders do so based upon fear-based elements in their emotional makeup. We have enumerated some of those fears and discussed them briefly. Another group of traders wants to hone their skills into near perfection on a simulator. No one trades perfectly, that's a fact.

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