What can happen playing the HIGH RISK game of foreign currency futures....!

Boyd, I have to agree and disagree with you on the 'paper trading issue.'

Personally, I find paper trading boring, but it has been a good learning experience for one reason, especially if you subscribe to a service that gives you real time quotes and you can track a stock.

We have a 'watch list' of those stocks/options that we'd like to own but are perhaps slow movers or are not 'strong buys' right now. But financially, we know they are strong, and just not performing well right now but we 'feel'they'll come around some time.

In hindsight, of course, we should have bought them when they were at their lows, because they have all turned out to be big gainers.

But getting back to the paper trading issue, I like it because it gives me a good idea of how the stock is performing over e.g. a 6-12 month period. Some stocks go into a long consolidation period, and as an amateur trader, often one will panic and sell if a stock is trading sideways or starts to trade down. But if you get to know a stock, you'll just be patient, wait for the volume to build and momentum for it to take off. You seem to be an experienced trader so you'll know that patience is key to gettting in and out at the right time.

I have a very amusing story to tell about 'getting to know your stocks.' When I first started trading, I wanted to have control over my own portfolio, but didn't have enough disposable cash to make it worth my time. So I and my best friend decided to open a joint account and together we started with $6,000, and we also requested that it be set up as a margin account. So, after the a/c was set up, I went online and noticed that the 'cash available' read $23,000. So, not knowing much about how much margin we were eligible for, we thought, great, we could have a field day with $23K.

So, I bought shares in a stock totalling $6K But prior to this, we had also spent $6K. Then I got THE MARGIN CALL. Merciless people that are given this very unpleasantjob. I had to come up with $5K or sell the shares because they had dropped. Naturally, I could not understand what had happened as my cash balance was showing $23K.

What had happened is, there was a systems error. And not giving any thought to how much margin we were eligible for, we just went on a spending spree. Duh!!

So now we were both very nervous as we didn't have $5K readily available, and neither of us wanted to tell our spouses about the incident, as we had promised NEVER to buy on margin. But we figured, we could outsmart the system.

Anyway, by the grace of God, the following morning, the stock gapped up $12.00, giving us a very nice profit and covering our margin call.

I can't tell you how much I prayed. In fact, that day, I never ate a meal and don't recall sleeping that night.

Since that incident, I've watched this stock's trading pattern, and know it very well. Had I done some paper trading before, I would have known that it was not unusual for this stock to trade down for several days, and suddenly gap up after 2 -3 weeks.

So, paper trading can be useful when you want to learn about a stock. And of course, for the most part, the market makers do control this pattern.

Regards,

Eliz.

Eliz.