What is Paper Trading?
In a simulated market setting known as paper trading, participants make buying and selling decisions by handwriting them down rather than placing actual orders at a brokerage. The method might be straightforward—a few figures written on a napkin—or complex—multiple items broken down into their component pieces for reflection and analysis as spreadsheets. Many experienced traders engage in the technique sometimes, particularly when working on fresh ideas and approaches. New traders are frequently advised to paper trade until they understand fundamental trading strategies.