To start paper trading, open a trading simulator, create a virtual account, choose one market, and place trades using a written strategy instead of real money. For most beginners, TradingView Paper Trading is the simplest starting point because it does not require a deposit or broker account. If you want to practise options, futures or forex on a platform designed for live trading, thinkorswim paperMoney is another option.
Choose a Paper Trading Platform
| Platform | Best for | Account access | Main features |
|---|---|---|---|
| TradingView Paper Trading | Beginners learning charts, stocks, forex, crypto or futures | TradingView account; no deposit required | Virtual trading, market, limit and stop orders, chart trading and portfolio tracking |
| thinkorswim paperMoney | Traders learning options, futures, forex or the Schwab platform | Schwab account or a 30-day Guest Pass | $100,000 in virtual buying power, plus simulated equities, options, futures and forex trading |
| Broker demo account | Practising on the platform you may eventually use | Requirements vary by broker | Platform-specific order entry, tools and market data |
To activate TradingView Paper Trading, open Supercharts, select Trade, choose Paper Trading, and click Connect. TradingView says the simulator supports stocks, forex, crypto, commodity futures, index futures and other markets.
Charles Schwab's thinkorswim paperMoney provides $100,000 in virtual buying power. Schwab says paperMoney supports simulated equities, options, futures and forex trading. Its Guest Pass provides 30 days of access without opening or funding a Schwab brokerage account.
Step 1: Decide What You Will Practise Trading
Do not begin by trading every market at once. Choose:
- One asset class: stocks, ETFs, options, forex, crypto or futures
- One or two instruments: such as Apple stock, the SPY ETF or the EUR/USD currency pair
- One timeframe: such as daily charts, one-hour charts or five-minute charts
- One trading style: investing, swing trading or day trading
Liquid stocks or ETFs may be easier for a beginner to understand than leveraged products. Options, futures and forex add variables such as expiration dates, contract sizes, margin requirements and borrowed buying power.
Step 2: Set a Realistic Virtual Account
Paper trading accounts often provide more virtual money than you plan to use in real life. A $100,000 practice account can encourage oversized positions and risk-taking that would not make sense in a smaller live account.
Set the practice balance to match your planned live account as closely as possible. Also review:
- Commissions and contract fees
- Trading hours
- Margin settings
- Position size
- Stop-loss and take-profit rules
- Market data settings
TradingView allows users to change commission and buying-power settings in Paper Trading. Greater buying power increases the size of both potential gains and potential losses.
Step 3: Write a Simple Trading Plan
Paper trading is more useful when you test a defined process rather than buy and sell at random.
Write down:
- Entry condition: What must happen before you enter?
- Entry price: At what price will you buy or sell?
- Stop-loss level: Where will you exit if the trade moves against you?
- Profit target: Where will you take profits?
- Position size: How many shares or contracts will you trade?
- Maximum risk: How much money can the trade lose?
- Exit rules: When will you close the position early?
- Review criteria: What will determine whether the trade followed your plan?
For example:
Buy 25 shares when the price breaks above a defined resistance level. Place the stop at $48, set a target of $54 and risk no more than $50.
Written rules make each trade easier to evaluate. Without them, paper trading can become entertainment instead of practice.
Step 4: Learn the Main Order Types
Understand the order types before placing your first simulated trade.
| Order type | How it works |
|---|---|
| Market order | Attempts to execute immediately at the best available price |
| Limit order | Executes only at your specified price or a better price |
| Stop order | Activates when the market reaches a trigger price |
| Stop-loss order | An order intended to close a losing position |
| Take-profit order | An order intended to close a profitable position at a target price |
A market order generally prioritises execution over price. A limit order prioritises price over execution. In a fast-moving or illiquid market, the simulated fill may not match the fill you would receive with real money.
Step 5: Calculate Your Position Size
Use your intended account size rather than the simulator's default balance.
A basic position-sizing formula is:
Position size = Maximum dollar risk ÷ Risk per share
Example:
- Practice account: $10,000
- Maximum risk per trade: 0.5%
- Maximum dollar risk: $50
- Entry price: $50
- Stop-loss price: $48
- Risk per share: $2
- Position size: $50 ÷ $2 = 25 shares
This calculation keeps position size from being based on guesswork. It also requires you to set the stop-loss before entering the trade.
Step 6: Place and Manage Your First Paper Trade
Before submitting the order, check:
- Ticker or contract
- Buy or sell direction
- Quantity
- Order type
- Entry price
- Stop-loss price
- Profit target
- Estimated commission or fee
- Whether margin or borrowed buying power is involved
After placing the trade, follow your plan. Do not move the stop simply because the trade is losing. Do not take profits early just to improve your simulated win rate.
TradingView provides an account manager where users can review positions, orders, trade history, realised profit and loss, unrealised profit and loss, and other account information.
Step 7: Keep a Trading Journal
Record every trade in a spreadsheet or journal. Include:
- Date and time
- Instrument
- Long or short direction
- Entry price
- Stop-loss price
- Target price
- Position size
- Reason for entering
- Result in dollars and percentage terms
- Whether you followed your rules
- Chart screenshot
- Mistakes or emotional reactions
The most useful question is not simply, "Did I make money?"
Ask:
Did I follow the same process I would use with real money?
A profitable trade that broke your rules was not necessarily a successful practice trade. A losing trade that followed your plan may provide better information.
How Long Should You Paper Trade?
Continue until you can consistently:
- Follow your entry and exit rules
- Calculate position size correctly
- Use market, limit and stop orders
- Record every trade
- Accept losing trades without changing your plan
- Review results across a reasonable sample of trades
- Account for spreads, commissions and possible slippage
Review the strategy after a set sample, such as 20 to 30 trades. Changing the rules after every win or loss makes the results difficult to interpret.
The goal is to find out whether your process works across different market conditions, not whether one trade made money.
Paper Trading Limitations You Should Understand
Paper trading helps you practise, but it does not recreate every part of live trading.
Simulated Fills May Be More Favourable
A simulator may not fully reproduce:
- Bid-ask spreads
- Slippage
- Partial fills
- Low liquidity
- Delayed execution
- Price gaps
- Order rejection
- Emotional pressure
The CFTC warns that hypothetical or simulated results may overstate or understate actual performance because simulated trades do not experience every condition of real execution, including liquidity and slippage.
Paper Trading Removes Financial Emotion
A simulated loss does not affect your rent, savings or spending power. That can make it easier to hold losing trades, trade too often or accept risks you would reject in a live account.
Paper trading tests your process and platform skills. It does not fully test how you will behave when real money is at risk.
Virtual Buying Power Can Distort Results
A simulator may let you control more capital than you could responsibly use in a live account. Practising with excessive buying power can make a strategy appear more profitable than it would be with a realistic position size.
Market Data May Differ
Check whether the simulator uses real-time or delayed market data. Schwab's paperMoney materials describe simulated market data, while a Schwab tutorial notes that paperMoney may display partially delayed data by default in some setups.
Paper Trading Versus Backtesting
| Method | Uses | Main weakness |
|---|---|---|
| Backtesting | Tests a strategy against historical data | Historical results can benefit from hindsight |
| Paper trading | Tests decisions in a live or simulated market | Does not recreate the full emotional and execution risk of real trading |
| Live trading | Tests the strategy with real money | Financial losses are possible |
Use backtesting to examine historical behaviour. Use paper trading to practise execution and discipline. Consider live trading only after you understand the risks and can afford potential losses.
When Should You Move From Paper Trading to Real Money?
Do not switch to live trading just because your simulated account is profitable. Consider moving forward only when you have:
- A clearly defined strategy
- A complete trading journal
- A realistic account size
- Consistent risk limits
- Experience with losing trades
- A clear understanding of fees and execution
- Enough savings to withstand losses without affecting essential expenses
If you decide to trade live, start with the smallest position size that lets you follow the same process. Do not begin with borrowed buying power simply because the simulator allowed it.
Bottom Line
To start paper trading:
- Open TradingView Paper Trading or thinkorswim paperMoney.
- Choose one market and a small watchlist.
- Set the virtual balance and risk settings realistically.
- Write one trading plan.
- Place trades with defined entries, stops and targets.
- Record every trade in a journal.
- Review a reasonable sample before changing your strategy or using real money.
Paper trading is a structured training tool. It can show whether you follow a process, but it cannot prove that a strategy will make money in a live account.