Paper trading is a way to practice investing without risking any real money. It can be done with multiple assets including stocks, options, futures, Forex, and more. 

In this guide, we will walk you through the basics and teach you how to get started. 

We will also discuss the advantages and disadvantages of paper trading, and answer some common questions people have about it. Finally, we will tell you where you can go to paper trade for free! 

What is paper trading? 

It is the process of buying and selling securities without using real money. This is often done by new investors to test their skills before putting their own money at risk. It can also be used by experienced investors to try out new strategies or experiment with different markets. 

What is meant by paper trading?

It is called 'paper trading' because, in the past, people would write down their trades on paper. Nowadays, most people use trading simulators or demo accounts that simulate the real market. This allows you to place trades and track your progress without using any real money. 

What is the best paper trading app? 

There are a few different paper trading apps available, but the one that we recommend is TradeStation. With TradeStation, you can trade stocks, options, and futures all on the same platform. 

Plus, their commission rates are some of the lowest in the industry. Another great thing about TradeStation is that they offer a free paper trading account so you can try out their platform before committing to a paid account. 

What is the best paper trading site? 

The best paper trading website is one that charges you a low monthly or annual fee, gives you access to high-quality research, and provides customer service that is responsive and helpful. A free website can be helpful, but it may not offer the same features as a paid site. 

For example, Warrior Trading offers a paper trading simulator that is perfect for beginners. The website replicates reality. This is important because you want to get a feel for how the market works before risking your hard-earned money. 

Is paper trading good for beginners? 

It can be a great way for beginners to get started in investing. It allows them to try out different strategies and find out what works best for them without putting their own money at risk. 

Beginners can often experience 'paralysis by analysis' when there is too much new information they are not familiar with. This can cause missed trading opportunities. By starting with paper trading, they can get over this hurdle and start trading with confidence

Advantages of paper trading 

There are a few benefits to paper trading. The most obvious is that it is a way to practice without risk. This can be helpful for new investors who want to learn the ropes before putting their own money at risk

It can also be useful for experienced investors who want to try out new strategies. Paper trading can also help you keep emotions in check. When real money is on the line, it can be easy to let emotions influence your decisions. 

This can lead to making bad decisions that cost you money. When you paper trade, there is no real money at stake, so you can make decisions based on logic and reason instead of emotion. 

Overall, it is a great way to learn about the market and hone your investing skills. It can be a helpful tool for both new and experienced investors. 

Disadvantages of paper trading

One of the main disadvantages of paper trading is that it can be difficult to find a website or app that charges you low monthly or annual fees

Additionally, some free websites may not offer the same features as paid sites. For example, you may not have access to high-quality research or customer service. 

Another downside of paper trading is that you don't make any money from it. This is because you're not actually investing any money; you're just simulated buying and selling securities. 

So, even if your portfolio grows in value, you won't see any real returns until you start investing actual money. It can also feel like you are wasting time because you're not actually making any money. 

By spending time paper trading, you could be missing out on really profitable trades. This can be discouraging and might cause you to give up on investing altogether. 

It also does not simulate the emotional side of trading. This is because traders know that the money isn't real. Psychology and emotions play a large part in real trading and you may not get the same type of experience by just paper trading. 

Finally, it's important to remember that some platforms aren't a perfect replica of the real market. This is because real-world factors, such as news and events, can influence the market in ways that paper trading doesn't account for. 

So, while it can be a helpful tool, it's not a perfect way to learn about investing. 

Can you paper trade on Robinhood? 

Unfortunately, Robinhood does not offer a paper trading feature. This is because the platform is designed for people who want to invest actual money. While you can't paper trade on 

Robinhood, you can use the app to track your portfolio and see how it performs over time. 

Remember that trading apps make money through commissions. They may not feel incentives to invest in the development of a paper trading platform. However, some platforms may see the benefit of aiding beginners in their investment journey. 

Can you paper trade Crypto? 

Yes, you can paper trade cryptocurrencies. Cryptohopper is a popular platform that allows for paper trading. This is a great way to learn about the crypto market and get a feel for how it works before investing any money. 

With crypto paper trading, you are essentially trading with virtual money that has no value. This can help you learn how to trade with real money to profit from digital assets that also have real-life value. Crypto is a volatile asset class. 

By starting with paper trading, you can get used to the ups and downs of the market before risking real money. Cryptocurrencies are often a part of projects that have not proven their use case. This can be different from stocks, where you can track the financials of a company to make an investment decision. 

How to start paper trading? 

There are a few different ways to paper trade. The most common is to use a paper trading account with a broker. This is an account that uses fake money, so there is no risk of losing real money. 

Most brokers offer paper trading accounts to their clients. Another way to paper trade is to use a simulator. This is a program that simulates the experience of buying and selling securities. It can be a good way to test out new strategies or learn about the market without risking any money. 

The best way to paper trade is to use a combination of both a paper trading account and a simulator. This will give you the most realistic experience possible.

How to paper trade for free 

As mentioned earlier, TradeStation allows for free paper trading

It is also available for free with some popular brokers like TD Ameritrade

Webull is also a great platform for paper trade for free

To get started, you will need to set up a paper trading account with a broker. This is usually done through the broker's website. Once you have an account, you will be able to use the broker's platform to buy and sell securities without actually trading with real money. 

Each platform has its own rules and regulations. For example, some may only allow for a limit of virtual currency before you have to pay a fee. Others may require you to link a bank account or credit card. 

Of course, you can also go with the old-school route of writing down hypothetical trades on paper. Although this doesn't simulate the real market, it can still be helpful in learning about the market and how to place trades.

Common questions about paper trading 

Do you have to start with paper trading? 

No, you don't have to start with paper trading. You can start by investing a small amount of money in a few stocks or ETFs. However, if you are looking to actively trade, it can be a good way to test your strategies. 

I've been losing money on real trades. Should I go back to paper trading? 

If you are losing money on real trades, it is probably a good idea to go back to paper trading. This will allow you to test your strategies without putting any real money at risk. 

Is there any way I can make a profit from paper trading? 

No, you cannot make a profit from it. However, you can use it to test your strategies and see if they are successful. If your strategies are successful, you can then apply them to real trades. 

When should you switch to real trading after starting with paper trading? 

There is no set answer to this question. It depends on your goals, trading style, and risk tolerance. You should paper trade until you are confident in your ability to make profitable trades. Then, you can start trading with real money. 

I'm trying a new trading strategy. Should I test it out with paper trading first? 

Yes, you should test out your new trading strategy with paper trading first. This will allow you to see if the strategy is successful without putting any real money at risk. New strategies can often be risky, so it is best to test them out before using them with real money. 


Overall, paper trading has its advantages and disadvantages. It can be a helpful tool for new and experienced investors, but it's not always a perfect replica of the real market. 

The psychological factors may not also be trained as compared to when real money is on the line. It can also feel like a waste of time for some people. 

Each person has to decide if paper trading is right for them. For some, it may be the best way to learn about investing. Others may find that it's not worth the time and effort. 

If you sign onto a trading platform and it looks overwhelming, it may be better to start with paper trades. This will help you understand the different terms, charting patterns, and strategies.