Category Archives: FAQ

Every time I hear someone compare commodities to gambling, I think of Matt Damon’s character from the movie Rounders, in which he is talking about playing poker. At a high point in the film he says angrily to his girlfriend:

Why does this still seem like gambling to you? Why do you think the same five guys make it to the final table at the World Series of Poker every single year? What, are they the luckiest guys in Las Vegas?

It’s my favorite part of the movie. The character is finally confronted with having to tell his girlfriend the truth that he’s been playing poker again. It’s revealing in a couple of interesting ways. And they both line up to trading commodities.

1. Matt Damon’s character is right. “Big name players…have made millions of dollars over the courses of their careers. They show up time and time again at the final table of major events.” And there are a ton of other reasons to suggest that poker is not gambling as well. (Check out this article which explain more about the above quote and explains many other reasons.)

   The same is true of commodities. If it was just pure gambling, people wouldn’t be able to consistently make money trading commodities and “win at the game”. But people do it all the time! They work hard, look for the signs, and make money in trading commodities. People literally make a career out of this! A career they can spend at home or abroad!

2. You can make a gamble of anything. How many times in our lives do we just put the money down without doing research and hope things turn out ok? Matt Damon’s character did this. He got lost and started gambling rather than sticking to his plan (hence the conflict with his girlfriend). Is it possible to throw money at the commodities market and just gamble? Absolutely. That’s how most people do it, in fact. But we think there’s a better way.

At papertrademe.com, we’re looking to take the gamble out of trading commodities. Go in with a proven plan, execute it, and win more times than not. Then, watch your account balance go up. Honestly, that’s the whole point of what we do! You can take your hard-earned money and throw it at a broker and hope everything turns out ok (talk about a gamble!), or you can paper trade, save your money, and practice until you get it right! Then, when you’re ready to make that first real trade with a broker, it won’t be a gamble, it will be a proven plan that will win over the long term.

Is there risk in trading commodities. Absolutely! But those risks can be mitigated.
Just look at your own life today:

• Are there risks in driving a car? Absolutely! Wear a seatbelt.
• Are there risks in your job stability? Absolutely! Learn new skills.
• Are there risks to your health? Absolutely! Don’t drink too much. Eat right.

There are risks in commodities. But those risks can be lowered by planning.

So, is trading commodities pure and simple gambling? No, it’s not. And just like anything else in life, there is a smart way to do things and a foolish way. We want to help you do the smart thing.

Join papertrademe.com today! Sign up here: http://papertrademe.com/signup/

We want to be able to control our own money.

If you look online for places to invest your money, there’s no shortage of people who will gladly take it and invest it as they please. They’re the experts, right? If you’re like us, we’re a bit skeptical of investors. Once they have your money and the freedom to trade as they please, there’s no real incentive to be profitable…at least not to the extent that you have to invest your own money.

Brokers don’t really want to help you.

Have you looked online for sites that will help you trade commodities? Sure, you can practice…for about 2 weeks, and then the brokers want you to invest lots of money.

The reason they only give you 2 weeks is because they don’t make any money unless you’re trading. But 2 weeks just isn’t wise. We’re talking about trading potentially huge amounts of commodities? No way. We need time to figure this stuff out.

We need to practice.

Each of has hobbies. From learning Chinese to gardening to DIY improving our homes our hobbies run the gamut. Well, guess what? They take practice. And we continue to practice each of these hobbies on a regular basis. We can use each of these skills in real life, but in order to get better, we have to continue to practice.

We’re learn-by-doing kind of people.

We don’t know about you, but learning the theory of any subject gets old fast. It’s so much more rewarding to actually apply your knowledge in real life. That’s exactly what papertrademe.com does. It allows us to practice trading commodities as if it were real! If we had actually made the trades, we would see the same results!

We like to experiment.

What if there’s a better way? What if that “expert trader” on the TV actually knows what he’s talking about? What about that new way of technical trading? Well…let’s test it out. We’re not going to waste our hard earned money without first giving it a shot in practice.

At the end of the day, we really want to take our futures into our own hands. We can study this stuff all day, everyday, but until we’re actually doing this for ourselves, it’s not worth anything. With papertrademe.com, we’re practicing in real life conditions because we know that “Practice makes Profitable“.

If you have finally decided to invest in futures, there is no better way to test your intuitions and strategies than to get in there and start trading! This method, while being an invaluable teacher, will also put you at some serious monetary risks. The market will not spare inexperienced traders or untested strategies. There are ways to assess your plans and sharpen your skills on the trading floor without actually losing or making any money. This is called paper trading.

What is paper trading?

Paper trading is trading that happens only on paper. Trading on paper allows you to trade in real time conditions using real market indicators and prices. The only difference is there is no money or actual futures contracts involved, so there is no risk of losing money. It is merely a trading exercise that will let you have ongoing practice to test out your strategies.

How to start paper trading?

When you start paper trading you should have a strategy mapped out. You should have an idea of how much money you would like start with, what kind of commodities you are looking for, the margin and maintenance costs, what price they are trading at and what your stop loss level is. You should be clear about entry and exit. Most important of all, you have to be honest and serious; do it like your money is really at stake. So aversion to risk and return objectives should also be set.

• Step 1: In a dedicated notebook, write down the total amount of money you would like to start with. This starting balance is only paper, so you can make it whatever you want. Start off with a good amount and keep it round for simplicity of calculation.
• Step 2: On a sheet of the notebook write down the name of the commodities you would like to invest in and the current market prices next to them. Do not go about rounding off, stick to the exact values.
• Step 3: Track your investment every day. See your results in each and every day! Of course, don’t forget to calculate taxes and broker fees. In a separate blog post, we’ll share on how you can calculate profit and loss.

This process, though vital to success in the futures market can be a bit tedious. Papertrademe.com is an online paper trading simulator where you can or mock trade exactly like explained above. It will track all the data and runs the numbers for you automatically! We do all the hard work. All you have to do is make the trades! This makes the whole experience much more current, realistic, and realtime. Check out papertradme.com today!