Paper trading refers to practicing stock or options trading by tracking the performance of real stocks and portfolios without risking any actual money. It allows traders to test out strategies and gain experience in the markets without committing real capital.

How Paper Trading Works

Paper trading simulates actual trading and market conditions using either:

• Historical market data and charts

• Real-time market data, news and prices

Traders open a virtual paper trading account and mimic buying and selling stocks or options as if doing it with real money. The paper trading account is funded with virtual money to trade for practice.

As stock prices fluctuate during market hours, the trader builds positions and executes buy and sell orders. The portfolio and account balance adjusts based on the simulated trading activity.

Performance is tracked in terms of net profits or losses to evaluate strategy effectiveness. However, no real money is exchanged.

Benefits of Paper Trading

• Practicing trading in a risk-free setting without losing money

• Testing out new strategies and ideas before committing capital

• Gaining experience reading charts and identifying trade signals

• Understanding order types, execution, and position sizing

• Knowing the mechanics of trading platforms and software

• Assessing areas for improvement by reviewing past trades

• Building confidence by applying skills in a live market environment

Overall, paper trading allows developing trader skills with zero financial risk. It is an essential step for beginners before placing real money trades.

Paper Trading on TradingView

TradingView is a leading charting platform and social network for traders. It offers a built-in paper trading feature to practice trading stocks, forex and crypto without any risk.

How to Use TradingView Paper Trading

Follow these steps to paper trade on TradingView:

• Create a free TradingView account and login

• Access the paper trading module under the Journal tab

• Choose a paper trading exchange like NYSE/NASDAQ, FOREX etc.

• Deposit your starting virtual capital of say $100,000

• Adjust settings like session hours, order types etc.

• Search and add stocks or currency pairs to your watchlist

• Execute sample buy and sell orders for your watchlist symbols

• View account balance, net P/L, open positions etc. in real-time

• Analyze performance to improve trading strategy

Key Features of TradingView Paper Trading

TradingView paper trading includes these useful features:

• Real-time pricing data for US stocks, forex etc.

• Paper account statement, portfolio and P&L tracking

• Market, limit, stop and bracket order types

• Short selling capability with uptick rule check

• Order entry from charts or DOM widget

• Analysis of trades, risk vs. reward etc.

• Chat with other traders and copy strategies

Overall, TradingView provides an excellent platform to practice active trading in a simulated real-world environment. The free paper trading account offers a wealth of features to develop and test strategies.

Top Paper Trading Platforms

Here are some of the best paper trading platforms and simulators for different markets:

Stocks

Thinkorswim – Fully functional paperMoney account from TD Ameritrade
Webull – Paper trading integrated with live stock charts
Investopedia – Stock market simulator with leaderboard

Forex

Oanda – Practice FX trading on desktop, web and mobile
TradingView – Paper trade forex with free real-time data
NinjaTrader – Feature-packed futures and forex trading platform

Crypto

Bybit – Virtual crypto trading with up to 200x leverage
Phemex – Zero-risk crypto paper trading environment

Options

Thinkorswim – Options paper trading using real market data
Tastyworks – Zero commission options trading practice

Futures

AmpFutures – Virtual futures trading integrated with live charts
Tradovate – Scalable futures paper trading platform

General Trading

WallStreetSurvivor – Virtual trading with free stock lessons for beginners
BlackBoxSimulator – Downloadable stock market paper trading software

When choosing a paper trading platform, look for responsive order execution, real-time data, and a robust feature set for your trading requirements. Many brokerages also offer paper trading linked to live market data.

Top Paper Trading Mobile Apps

Here are some good paper trading apps for practicing on the go:

thinkorswim Mobile – PaperMoney app from TD Ameritrade

Webull – Zero commission stock and options paper trading

MetaTrader 4 Demo – Popular forex trading platform demo app

PaperFly – Virtual options trading with real-time alerts

Bux – Stocks and crypto paper trading in virtual tournaments

Paper Trading Options – Practice options trading strategies

Trading Game – Virtual stock trading app for beginners

The convenience of mobile access allows paper trading anywhere. Apps also simplify tracking watchlists, orders and account balances on the go.

Tips for Effective Paper Trading

Follow these tips to get the most out of paper trading:

• Treat it like real money to simulate emotions during trades

• Define strategy rules and risk management for discipline

• Experiment with position sizing and test strategies

• Keep a trading journal and review trades regularly

• Don’t overtrade; practice patience and wait for best setups

• Use paper trading results to set expectations for live trading

• Understand slippage, spreads and liquidity effects

• Practice more during volatile and high-volume conditions

• Paper trade over a reasonable period to assess consistency

Paper trading works best when approximating the real trading environment as closely as possible. The experience gained will better prepare for efficiently executing trades with actual capital.

Moving from Paper Trading to Live Trading

Once achieving profitability in paper trading, use these tips when moving to live trading:

• Start small – Risk only 1-2% of capital per trade initially

• Focus on executing your strategy, not profits

• Control your emotions and stick to planned trades

• Scale position sizes gradually as you gain experience

• Don’t overtrade or revenge trade; stick to rules

• Analyze mistakes and continue improving

• Keep paper trading for testing new strategies

• Consider automation to remove bias and emotion

Patience and discipline are key. Build confidence and skill before risking more money. The experience gained from paper trading will help you successfully transition to trading with real capital.

Conclusion

Paper trading provides an important step for traders to gain experience in financial markets without risking money. Trading stocks or forex virtually helps test strategies, learn mechanics, practice disciplines required for trading, and build confidence. Leading paper trading platforms provide simulated environments mirroring real-world market conditions to practice everything from order types to risk management. Paper trading mobile apps also enable conveniently honing skills on the go. While it cannot fully replicate psychology involved with actual money, diligent and serious paper trading can significantly boost your chances of trading success once going live.