Choose a platform
Match to your live broker whenever possible. If you plan to trade with TD Ameritrade, use thinkorswim's Paper Money. Planning on Interactive Brokers? Use their Trader Workstation demo.
Platform Selection Criteria
- • Same order entry interface as live account
- • Identical market data feeds (Level 1 vs Level 2)
- • Realistic execution simulation
- • Access to same asset classes (stocks, options, futures)
- • Mobile app functionality if needed
Market Data Requirements
- • Real-time quotes for active strategies
- • 15-minute delay acceptable for swing trading
- • Level 2 data if you trade momentum/scalping
- • TotalView for full order book practice
Configure realism
The biggest mistake in paper trading is unrealistic settings that give false confidence. Configure your simulator to mirror real-world conditions:
| Setting | Realistic Configuration | Why It Matters |
|---|---|---|
| Starting Capital | Match your actual available funds | Practice proper position sizing |
| Commissions | $0 stocks, $0.50-0.65 options contracts | Account for real trading costs |
| Slippage | 1-3 cents on liquid stocks, more on illiquid | Market orders rarely get perfect fills |
Track results
The goal isn't just to make paper profits—it's to develop systems and habits that work with real money.
Pre-Trade Checklist
- • Why am I entering this trade?
- • What's my exact entry trigger?
- • Where will I take profits?
- • What's my stop-loss level?
- • How much am I risking?
During the Trade
- • Did my entry execute as planned?
- • Am I managing emotions properly?
- • Is the trade thesis still valid?
- • Should I adjust my stop-loss?
- • Am I following my plan?
Post-Trade Review
- • What went right/wrong?
- • Did I follow my rules?
- • Was entry timing optimal?
- • How can I improve next time?
- • Was position size appropriate?
💡 Pro Tip
Even experienced traders return to paper trading when testing new strategies, trading in new market conditions, or after a string of losses. There's no shame in stepping back to practice—it's a sign of discipline.
Frequently Asked Questions
How long should I paper trade before going live?
Minimum 3 months of consistent results, but many traders benefit from 6-12 months. Focus on consistency and discipline rather than arbitrary time periods.
Should I paper trade the exact same dollar amounts I'll trade live?
Yes—use position sizes you can actually afford. This teaches proper risk management and prevents overconfidence from unrealistic position sizing.
What if my paper trading results are too good to be true?
They probably are. Check your settings for unrealistic fills, no slippage, or perfect timing. Real trading includes costs and imperfections that paper trading often ignores.