Why I Don’t Paper Trade Stocks
Note – I made a foolish trade yesterday on stock (SVU) SUPERVALU Inc. I just started scanning some stocks which is new for me. I found 5 in total the night before. Too much for a newbie trader. Anyway, I entered too late into the trade after the morning rush. Fear and feeling overwhelmed contributed to the mistiming of this trade. Yes I ended up with a $24 gain but not a smart trade all in all on my part. However, this is the reason I am writing this post.
There are many reasons we decide not to do things in life and I found a real personalized reason why I don’t paper trade stocks. Now to make myself clear I have nothing against paper trading stocks and I think it can work for those individuals who fit certain criteria. Off the top of my head I can see someone paper trading who might have a really small account with very little wiggle room to lose money. I mean they do say that practice makes perfect, so better to make perfect with paper money if you don’t have a lot of real money to practice with. However, if you are torn between paper trading stocks or trading with real money this will help you understand why I don’t paper trade stocks.
I am an emotional man. There I said it. No, don’t get me wrong I don’t mean I’m bi polar, psychotic or Nathan Lane in The Birdcage. No what I mean is I have a wide range of emotions running inside of me at one point or another. Let me explain. When my kids were born I was the happiest man on earth. Everyone in the world was perfect to me. I talked to strangers in the elevator, lobby and New York City streets. That’s not all. I get painfully angry when my daughter accidentally hits me in the jewels while we are all sleeping in MY bed. Hold on I have more. I am embarrassed when my son picks his nose in the elevator because (embarrassingly speaking) he probably learned that from me. And every time Jimmy Stuart finds Zuzu’s pedals in his pocket in It’s A Wonderful Life I get super misty. No it’s true. It gets me every year.
Ok ok…, I know what you are thinking. How does this all relate to why I don’t paper trade stocks? Here it is. Paper trading stocks would remove the emotional element to my trading. You see I get very nervous when I am trading stocks to the point where my heart feels like it’s dying to get out and slap me in the face for making it work harder than it wanted to. Don’t believe me? Check out this blog post I wrote here. I mean let’s be real. Have you ever given someone profound advice and then found yourself in the same exact situation that you were advising on but now can’t take your own advice? I hate to brag but I am a GENIUS with my advice when I am not emotionally invested.
Anyway, it’s that simple for me. I get too emotional and if I paper trade I won’t learn how to channel the emotion nor will I have a personal point of view in the stock trade. Yes paper trading isn’t bad and maybe YOU should do it for a while for personal reasons but I choose not to. I would rather test the (stock) waters with a very small position with real money on the line to see if my thesis was correct. Who knows I might even make a few dollars in the process without having a heart attack. 🙂
If you have any questions please place your comments in the comment section below. Thanks.