Differences between paper trading & real money trading

Most people (including me sometimes) lack the right mindset, patience, and planning when it comes to trading. There is no magic technical indicators in trading, it all comes down to simple tools, just like my paper trading journey outlined in this BTCUSD chart.

In the chart, I observed that:

1. BTC was no longer trending as its price was ranging for nearly 50 days after the ATH;
   
2. BTC momentum was weakening as it broke previous two horizontal support areas;
   
3. Price came to the potential 120 EMA / trendline / downward channel support clusters.
   

Since most of the time, asset price is ranging rather than trending, all we need to do is plot out the Fib levels in our chart and buy at support sell at resistance. You can see my major trades outlined in the chart. I did the same for other crypto symbols ETH & SOL at the same time.

However, when it comes to real money trading, I would trade slightly differently.

1. The mentality in paper trading is more aggressive. Usually in real money trading, when major support areas are broken, I would not fade a trend and try to catch the falling knife even you know there is potential support. What I'll most likely do is to wait for price breaks above the descending trendline (shows the strength) and look for opportunities in a potential 1-2-3 or 2B reversal pattern.
   
   
2. In real money trading, I try to follow the trend most of the time (price stands above all the moving average) But in paper trading, you have to be the minority in the market to stand out from the competition, which usually means go against the market. Even though we know this looks like a fib range trading scenario, it's better to enter your fading trade after a lower high or higher low is created.
   
   
3. In reality, make full use of the capital all the time is not recommended, especially when you about to trade against the current trend. Always try a small position first when doing so and build up your position along the way. However, in this competition, the forex pair EURUSD and SPX500 have low volatility, we have to trade maximum allowed quantity of each symbol in the hope of increasing account profits.
   
   
4. Lastly, do not overtrade, which makes sense for both paper and real money trading. It's easier to do so in paper trading as people would worry much less about the profits/losses they have made.
   

All in all, I'm just lucky enough to get the 2nd place in this competition, always respect the market and the market is always right.

Comment:

Many people DM me to ask how do I determine entry and exit, and what script/indicator I'm using.

What I really want to say is that the key ability in swing trading is not what script or indicator we're using, is the ability to identify the price structure (is it trending or ranging) and observe the price strength.

There is no magic indicator or script in the world, otherwise everyone will be a billionaire. After you get the first two questions right, simple tools like trendline, moving average, fib level, support/resistance, common patterns etc. are enough to do the job in swing trading.