There is simply no substitute for real money trading.  There are lots of resources out there that allow people to play around and paper trade with fake money, but there is often a disconnect between how a trader behaves when the money is fake compared to when the money is real.  Understand that when you begin trading for the first time, you probably won’t be very good at it.  It would be wise not to bet big early on, but you have to play with real money, real money that will sting when you lose it, otherwise you cannot expect to gain trading wisdom, which only comes from real experience.

If you’ve ever played poker online, I’m sure you’ll notice a difference between play money games and real money games.  In play money games, the players seem to go all-in every time hoping to get lucky, because there’s literally nothing to lose.  When playing for real money, even very tiny amounts, the action changes because the consequences of poor decision making are REAL and IMMEDIATE.

The best thing a novice trader can do is to determine the smallest amount of real money that feels consequential.  If it’s too small, you’ll go all in on a stupid trade too often and end up broke.  If it’s too big, you might just feel enough pain every time you lose that you never want to trade again.  Make no mistake, the market is cold and indifferent.  The only way we can hope to win in this game is to focus on what we can control, namely our system for market selection, entry, exit, and position sizing.