How to paper trade (step by step)

Updated 19 October 2026 · PaperTrade Finder guide

Below are the eight steps in detail. Each one takes minutes to set up; the value comes from repeating them consistently. If you are not sure what paper trading is, start with What is paper trading?

Step 1: Pick a market

Decide what you would eventually trade for real: US stocks, Indian F&O, UK shares, crypto, forex or futures. Practise in the same market, because trading hours, order types, tick sizes and volatility differ. If you live outside the US, check that the simulator covers your local exchange and is offered in your country. Our country lists show which apps are confirmed by the provider: US, India, UK, Australia and Canada.

Step 2: Choose a simulator

Four questions narrow the choice quickly:

• Does it cover my market and assets? Stocks only, or also options, futures or crypto? See options, futures and crypto.
• How fresh is the data? Delayed quotes are fine for long-term practice; for day trading you need real-time data.
• What does it cost? Most simulators are free.
• Do I need a brokerage account? Many broker demos require one; others work with just an email. See paper trading without a brokerage account.

If you already know which broker you will use, practise on its own demo so the platform is familiar on day one. New to all of this? Start with the beginner-friendly list.

Step 3: Set a realistic starting balance

Use roughly the amount you would actually fund, not the default. Many simulators default to $100,000, which encourages position sizes you could never take with a smaller account. If your app lets you change or reset the balance, set it to your real planned amount. For example, TradingView Paper Trading lets you reset to a new balance, currency and leverage, and LuxAlgo Vela Paper Trading lets you set each paper account's balance. If you cannot change it, simply pretend the extra cash does not exist and size trades as if it did not.

Step 4: Write a simple plan (your rules)

Write down what you trade, when you enter, when you exit and how much you risk. Keep it to a few lines:

• What: which instruments (for example, large US stocks or one index future).
• Entry: the condition that makes you buy or sell.
• Exit: where you take profit and where you accept you were wrong (a stop).
• Size: how much you risk per trade, as a fixed small share of the account rather than a gut feeling.
• Limits: for example, a maximum number of trades per day or a loss at which you stop for the day.

The point of paper trading is to find out whether you can follow these rules and whether they work, so write them before you trade, not after.

Step 5: Place your first trades

Learn market, limit and stop orders and size each position from your plan.

• Market order: buys or sells immediately at the best available price. Simple, but in a real market the price can be worse than the last quote you saw.
• Limit order: buys or sells only at your price or better. You control the price but may not be filled.
• Stop order: becomes an order once a trigger price is reached, typically used to limit losses.

Work out position size from your plan: the distance between your entry and your stop, multiplied by the number of shares or contracts, should equal the amount you decided to risk. Try every order type at least once, including cancelling and modifying orders, so the mechanics are automatic before real money is involved.

Step 6: Keep a trading journal

Record every trade, the reason for it and the result. A spreadsheet is enough. For each trade note the date, instrument, direction, entry, stop, exit, size, result, the reason you took it, whether it followed your rules, and a short note on how you felt. A screenshot of the chart at entry helps later reviews.

Step 7: Review weekly

Once a week, check whether you followed your rules and what the numbers say. Look at how many trades followed your plan, your average win against your average loss, your largest loss and your most common mistake. Change one rule at a time, and keep notes of what you changed, so you know what made the difference.

Step 8: Decide when to move to real money

Use clear criteria, not a feeling, and start small. Reasonable criteria before switching:

• You have followed the same written plan for a meaningful number of trades, over several weeks, across different market conditions.
• The results stay positive after you subtract realistic commissions, spreads and some slippage, which simulators often leave out.
• You know your worst losing streak and can afford it with real money.
• You place, modify and cancel orders without mistakes.

When you switch, start with a small amount and keep journaling. Expect real fills to be worse and decisions to feel harder; that is normal, and it is why paper trading results are only a guide.

This guide is general education, not financial advice. Trading involves risk of loss, and leveraged products such as CFDs, futures and options can lose more than you expect. Paper trading results do not predict real results.

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