skip to main content
Coach's Playbook Posted by Team Topstep January 20, 2021

Going From Simulated to Real Money Day Trading

Traders can face many psychological barriers when making the switch from simulated to real money day trading. We all know that success on a simulator is not a guarantee that you will successfully trade a live account. This harsh reality can sometimes be too much for some traders to come to terms with. However, there are other benefits to simulated trading than just testing out your strategy. This week, the Topstep coaches share their personal experiences with simulated trading and discuss some of the more common setbacks traders will face making the switch to trading real money.   

Funded Trader Shoutout

After a minor pullback in the equity index futures markets during the second trading week of 2021, it would appear that bullish sentiment is once again running strong. Could it be the excitement of a new administration moving into the White House, new advances in COVID19 vaccine distribution, or maybe that another round of economic stimulus is on the way? Whatever it is, there is an air of optimism in the markets right now, and Topstep traders are taking advantage of it. 

This week’s Funded Trader shoutout goes to Brian B., who is playing off the market’s optimism right now. He’s learning that pullbacks are for buying, especially in a market like the Nasdaq, which absolutely loves to rally. Brian caught a few rippers and put together a solid $2,500 trading day in the Nasdaq futures. Good things happen when you recognize the environment you’re trading in!

Emotions and Accountability

One of the simplest ways to overcome the emotional barriers you will face trading in a live account is managing your expectations. The probability of turning a $5,000 trading account into $1,000,000 in your first year is astronomically low. The odds are against you, plain and simple. So, to spare yourself some disappointment down the road, use your time on the simulator to set reasonable goals for yourself. You will see that the habits of a disciplined trader tend to be effective in any market environment.

When training on a simulator, the lack of accountability makes it easy to break away from your trading plan and take more risk than you should. Not having real skin in the game might have you thinking about making moves you would never even consider if you were trading real money. Shooting from the hip at every move you see is not sustainable. Iron out these kinks early on. Don’t give up on your trading plan. Your time on the simulator is for developing good habits, not bad ones. 

Trade Well!