I just want to get clarification on the market replay.
Is it so, that Whatever I do in the market replay as far as executing my trades, if I was doing it live the results would be the same?
If I won or lost a trade in market replay, if it would of been live and I did the same exact thing I would win or lose as well?
It is interesting that you post this question because I was going to post a question similar to this. Contrary to what most people think “Market Replay” is a very important tool but it can either help you or harm you.
For example people who are against guns are willing to give up their legal right to bear arms but the reality is that a gun has never killed a person. The person killed the other person and their tool of choice was a gun. There is not once single account where a gun walked up to a person and deliberately shot them.
You may ask what in the heck does that have to do with market replay?
I said that to say that its all in how you use it. (Market Replay) I remember when I was using the simulator all I did was take a few trades. No where near enough to develop the level of precision in my execution. All I was looking for was weather the strategy was profitable. The problem with that is that is I was focusing on the wrong thing.
Instead of looking to see if you won or lost those trades that you take in market replay focus more on how well you execute the trade. Focus only on what you can control. The reality of trading and earning consistent profits is all in how well you execute. You will never know which trade is going to be a winner or a loser.
Mark Douglas says something that I continue to remind myself with. I can’t find the exact quote but when I do I will share it with.
But what he is basically saying is that a system in the hands of a person that cannot execute it properly is worthless. Trading is all about execution and how well we perform on each trade. So I would say that you are on the right track. But if there was one thing that I would say to run away from is winner and loser mentality.
And the reason for that is because trading profits are earned over a series of trades not one or two. Now of course you can make money on one or two trades but the reality is that you will take thousands of trades over your trading career and there will be losing streaks. So if you end up in a situation where you focus on individual trades like wins and losses once a strategy has a string of losses you will give up on and search for something else. And that is a maze that you will never get out of!
So here a few things I recommend you do to save yourself from wasted time using market replay…
Focus on how well you execute your strategy not how much you earned.
Observe yourself and see if you are placing the entries, stop losses, trailing stops and exiting the trade the same way every time.
Try not to cheat…Don’t try and rewind market replay and take the trade again to add it as a successful trade.
Always remember that you are developing habits with each trade that you take and those habits can either benefit you to contribute to you blowing your account.
Treat the market replay like a live account.
Start with the same amount of money in the market replay that you will have in your live account. That will add an element of realness to it. If you can’t build an account on the simulator then you there is no way you will be able to do it in the live account for the long haul.
In closing…
Mark Douglas recommends that a trader should only go live once they can execute a strategy the same way for 25+ trades in a row. And this to me makes perfect sense from a neuroscience perspective. (I am not a neuroscience but I read and study the topi quite often.)
I hope that helped.