From Paper Trading To Real Trading

The tyro trader now decides to make the jump from paper trading to trading with real money.
He has looked at the different sports markets available, has identified those in which he is most confident and comfortable with. His paper trading practice dry runs have revealed a few strategies that show promise -- a decent profit overall with around 80% of his trades coming out on "the right side." Now it is time to reap the rewards with some real money trades.

However, the first few trades show a loss. The trader feels the first very slight sense of self-doubt. Why did a strategy that worked so well in simulation not work with real money?
Losses continue into the following day. And the losses get bigger with each trade. Emotion and Fear have now entered the equation. The trader begins to skip some trades which he would have unhesitatingly entered when paper trading. These trades would actually have shown a profit if he had traded them. Worse, the trades he does enter into just throw up more and more losses.
Despairingly, the trader begins to question his entire methodology. Maybe, he wonders, was his paper trading testing completely in error; did he incorrectly interpret the results?
After a week of mounting losses the trader decides to conclude his real money trading and return to further paper trading testing.

Is this just a scenario?
No, it happens every day to somebody, somewhere.
And there is a single indentifiable cause for this calamitous turn of events.................. although the trader has learnt the structures and methodologies of trading whilst paper trading, he has not learned the psychology of trading.
Tomorrow -- a review of the psychology of trading.