A beginner’s guide to paper trading

1. Write a plan first. Entry, exit, stop and position-size rules before you click anything.
2. Use realistic capital. Simulate the amount you would actually trade, not a million dollars.
3. Keep a journal. Record every trade, the reason, and the result.
4. Account for costs. Simulators often ignore slippage, brokerage and partial fills, so results look better than reality.
5. Run it long enough. A few weeks and dozens of trades say more than a lucky streak.
6. Treat losses seriously. The goal is to practise discipline, not to inflate a fake balance.

Limits of paper trading

Simulated fills are usually optimistic and there is no real emotional pressure. Use paper trading to test mechanics and rules, then start small with real money only if you choose to.

Helpful tools: position size, risk/reward, compounding. Browse simulators.