On Monday of this week, I bought $HEPA  @ $4.23 as an overnight hold. It closed at $4.12  I can't trade in the after hours or the premarket in my verifiable practice account.  On the day, it was acting in a way that looked to me like the next day it would go higher. I was wrong. The next day, it was down quite a bit from my entry price the night before.  I wanted to cut my losses quickly but I thought it could at least come up to the $4. resistance level which it eventually did.  But, it could also have dropped another .10 plus so I exited .10 earlier and lost an additional $1000 on the trade.  Still, I feel it was the right decision for that moment.  It could have been much worse. You never know for sure.  As it turned out, I don't think the stock ever came back up much above $4 resistance that day.  

I looked at this trade and tried to determine if there was any indicators that might have given me a better clue as to what that stock might do the next day.  Luck of the draw doesn't always explain things thoroughly. 

I realized when looking at the chart pattern, $HEPA had formed a head and shoulders and it was just about to touch the neckline.  That was a bearish indicator.  Next, I realized that the markets had gone in the red.  The markets were down.  That was another indicator that maybe I should not be holding that stock, or possibly, any stock overnight in a down market.  Three out of four stocks follow the market.  Those aren't great odds for an overnight hold.

My point is this.  I could have paid a very real price in a large dollar amount to learn new lessons, or, I could use my practice account and learn for free.  Almost every time a newbie makes a trade, there may be a market tuition price due to their lack of knowledge regarding trading.  

Tim often talks about this analogy.  Imagine coming out the woods, where you've lived your entire life without being exposed to society.  You arrive in the big city and you see people driving these shiny vehicles around and you want to be one of them.  So, you get into a car and prepare to drive.  You don't know anything about cars. You don't know how the gas pedal, the brakes or the signal lights work.  You don't know that a car needs gas and oil.  You don't know what a stop sign or a street light is.  Imagine all your moves as you learn to drive a car.  Perhaps your first move is to drive straight into the house in front of you because you don't know how to work the gas pedal or the brakes.  That could be the end of your driving career right there. Let's say you get another car and you drive through stop signs and intersection lights and you don't signal.  You don't slow down going around curves.  You don't look both ways for pedestrians.  Just imagine how many chances you would have to have an unpleasant, expensive and possibly even deadly, accident!

As a new trader, doesn't it make sense to learn in a practice account until you learn how to navigate through trades in a safe way?   I know it may seem very simple to a newbie.  A stock goes up.  A stock goes down.  You have a 50/50 chance of being right or wrong.  You may be thinking this is not rocket science.  Consider that 90-95% of traders lose their money.  Is it really that simple? 

Think about how many years a surgeon trains to be competent to perform brain surgery.  Would you trust your brain to some doctor who didn't train first?  What are your odds of having a successful operation?  What makes you think that you can trade competently if you haven't trained first?

My point is that you can learn for free in your practice account.  Or, you can trade with real money and your market lessons might end up being very expensive.  You get to choose how much risk you take while you learn the finer points of trading.  Just don't be like that person who comes out of the woods who doesn't know anything about how cars work or the rules of the road, and expect clear sailing and buckets of money to fall instantly into your lap.  You can get lucky a few times but to be consistently profitable, you need to educate yourself.  As Tim says, "First you get an education, and THEN you get the money." We are all thankful to Tim Sykes for teaching us to trade!

However you decide to trade, happy trading!  I wish you good luck and prosperity!