Online Paper Trading - Why It Is Worthless

2018-06-28 | John Carter

Online paper trading is a simulated trading system in which beginner traders can ‘practice’ investing without committing to or using real money. Many trading companies offer these online paper trading services, some offer free online paper trading, others have charges for online paper trading, that allow investors to try out various strategies in online paper trading(some stock brokerages allow ‘demo accounts’), or online paper trading can be carried out simply by noting down fees and recording the value of investments over time. The only reason for online paper trade is when a person is learning a new execution platform. This way they can figure out how to use the software through a demo account, and save themselves costly errors that arise when trying to place orders on an unfamiliar system. However, online paper trading a new setup is worthless because it does not take into account how a trader will act when there is real money on the line. That is what makes or breaks a trader and online paper trading does on predict this. It’s ok to trade smaller size, but without real money on the line it’s a complete and utter waste of time. I do not recommend online paper trading.