Virtual money on real prices, to prove an idea works before risking real money. Also called: paper demo. Finviro's term: “Paper Trading”.
What this trading is
Paper Trading (Paper Trading) is full execution with virtual money: orders, positions, profits and losses calculated on real market prices · and the portfolio is pretend. A flight simulator before flying: you test systems, ideas and yourself at no real cost in blood.
What it proves and what it doesn't
It proves: the logic of the strategy is sound, automated execution works, goals and allocations are reasonable. It doesn't prove: how you behave under real pain, or actual execution slippage (price gaps and partial fills treat paper gently in a way live money never does). The gap between the two is its final lesson.
Using it sensibly
Long enough to cover different market regimes (months, not days) · in a size that matches what you will really trade (practicing with a million, then trading a thousand, teaches bad habits) · and with written rules that get evaluated, not a mood that gets tried.
Hypothetical example
A trader tests a structural-bounce system on paper for three months: 34 trades with realistic fills, and finds that half of the losses come from one category (entering before inflation data). One exception rule was born from the lab for free that would have cost thousands live.
Common mistake
Staying in the lab forever or leaving it too soon: the first builds confidence without immunity to pain, and the second pays tuition with live money. A sensible bridge: enough paper trading, then live trading in small size that grows step by step.
Where paper trading misleads
It removes the most important variable: pain. Executing without real money makes sticking to the plan easy, and discipline collapses on the first real day. Its value is in testing the mechanics (can the condition actually be executed?), not in proving discipline.
Where to see it on the platform
The paper trading module runs virtual portfolios with live prices and a time-weighted performance record · the same measurement kit used for live trading.
The simulation portfolio tracks performance with a time-weighted method, and the trading journal compares what was planned with what was executed.
