Practice trading without risking real money
Paper trading (simulated trading) lets you:
✅ Learn platform mechanics without risk ✅ Test strategies with real market data ✅ Build confidence before using real capital ✅ Track performance and improve ✅ Understand order types and execution ✅ Experience market volatility emotionally
How Long Should You Paper Trade? Minimum 30 days, ideally 90 days or until you have: • 60%+ win rate • Consistent profitability over 30+ trades • Clear trading plan you follow • Emotional control (not chasing losses)
ThinkorSwim by TD Ameritrade ⭐ Best Overall • Realistic fills and commissions • Full options chain • Advanced charting • Mobile app available • Free with TD account
TastyTrade Paper ⭐ Best for Options • Specialized for options trading • Real-time data • Commission-free paper trading • Simple interface
Interactive Brokers TWS • Most realistic execution • Global markets • Professional-level tools
TradeStation • Good for testing algorithms • Advanced analytics
Webull • Easy to use • Good for beginners • Options available
Step 1: Choose Your Platform Pick one from the list above based on your needs
Step 2: Set Realistic Account Size Use the amount you'll actually trade with - If you have $5,000 to trade, use $5,000 in paper - Don't practice with $100,000 if you only have $2,000
Step 3: Configure Commissions Make sure commissions are enabled: - $0.65 per options contract is typical - Some platforms are $0 (check your broker)
Step 4: Create a Trading Journal Track EVERY trade: - Date/time - Ticker/strategy - Entry price - Exit price - P&L - Why you entered - What you learned
Treat It Like Real Money The biggest mistake: trading recklessly because "it's not real"
Focus on Process, Not Profits Your goal is to: 1. Learn the platform 2. Test your strategy 3. Build discipline 4. Develop a routine
Don't just randomly place trades - follow a plan!
Track These Metrics: • Win rate (% of profitable trades) • Average win vs average loss • Profit factor (gross profit / gross loss) • Max drawdown • Consecutive losses (can you handle them?)
You're ready for real money when:
✅ 30+ paper trades completed ✅ 60%+ win rate over those trades ✅ Net profitable after commissions ✅ You follow your trading plan consistently ✅ Max drawdown is acceptable to you ✅ You understand WHY trades won/lost ✅ Emotional control demonstrated
Going Live Safely:
1. **Start with 1/4 of your planned size** If you plan to trade 10 contracts, start with 2-3
2. **First 10 trades are "tuition"** Focus on execution, not profit
3. **No strategy changes for 30 days** Let your plan play out
4. **Journal religiously** Review weekly
5. **Scale up slowly** Add size only after consecutive wins
Red Flags to Stay Paper: • Revenge trading • Breaking your rules • Chasing losses • FOMO trades • Inconsistent results