Stock Trading and Other Things

How many days, weeks or months should I test my stock trading strategy?

How many days, weeks, or months should I test my stock trading strategy before using real money? So far my approach works but I'm not sure how long I should wait before risking real money.

Public Comments

1. You cannot [truly] accurately simulate whether a strategy works by making pretend trades. What hedge funds typically do is allocate a smaller amount of actual cash to trade strategies once they think there's a good chance of it working. This is because you can "backtest" and "mock trade" forever without ever actually knowing if a strategy works.

2. hi there!!

when you feel confident after trading the stocks with play money, when you feel that yes a particular when short will give me profit, when I roll the so and so bet would give me profit, ....then you can go ahead with real money

Play money feature will help you to learn to trade stocks in a better way and will help you to gain experience in trading

3. A. You should back test....... for example my broker allows me to back test tick by tick. I can pick a point in time and watch my stock in real time or 3 times real time.

B. A strategy can work a few weeks, months or years. They never work forever. So back testing allows you to verify your approach in a relatively short period. This way you're not wasting opportunity via paper trading in the actual market.

So in effect, back test for a few months.... but do the test in a few days.

If your broker doesn't offer true back testing.... you're with the wrong broker.
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