Day Trading Questions?

I asked a similar question yesterday, the responses were great, thank you.

Anyways, I have been Paper Trading for a while. With paper money, I easily averaged 2% a day. Monday, I started trading with real $25,000. The 25k is money I can lose, it wont hurt me if I lost it all. I have been successful all 5 days. It seems too easy, but I know Im missing something. Anyways, people keep saying Paper Trading is different from real trading.

Now that Im through my first week of real trading, what differences will I notice between Real and Paper Trading? Everybody keeps telling me theres a difference, but nobody tells me what the differences are.

Also, somebody said I need to have $25,000 minimum equity at all times, not just a 25,000 minimum balance... whats the difference? I am aware of the 25k day trade rule, but whats the difference between balance and equity?
Thanks guys. I appreciate your 2 responses. I still mainly wish somebody could tell me what dangers I should be aware of from my transition to trading real money vs paper.

It would hurt to lose this money, but only my ego. I have a good income outside of trading, thats the only reason why I did this. I do mortgages, with hard work, I can make 25k in a month... but its frustrating, and Im burnt out.

Public Comments

1. You are a day trader, what do you care? At the closing bell, you are supposed to no stock but all cash in the account. Balance = equity = all cash.

My advice to you, know how to safeguard your capital. Your $25K is meant for you to make money, not to lose it all. In the stock market, no amount of money is big enough for losses.

2. That is good that you have made money. Hopefully you will continue this trend.

Perhaps you could give an update on your results and performance after 2 months? A week of trading does not really give any strong indication that you can maintain this trend.

Just be careful not to be overconfident and end up with massive losses.

3. Here's a couple of differences you'll notice between paper and live trading:

1) Executions. Your executions in paper trading accounts are simulated and are generally very optimistic; After all, your broker wants to encourage you to trade. In a live environment, you'll experience greater slippage on market orders, and more partial fills on limit orders.

2) Emotions. Its always easy to take losses quickly when you're trading with paper money; But when those losses are with real dollars it can be very difficult not to go into "hold and hope" mode, which will make your losses greater than what you experienced in paper trading. This is the aspect of trading that causes the majority of people problems (one of the reasons I got into algorithmic trading).

I'd suggest scaling in your equity over time to get yourself used to the live environment without being fully exposed. Start with $5K, then increase by $5K each month until you're all in after 5mos. And keep your ego and emotions in check as best you can.

Good luck out there!