Trading System: Paper Trade

Even when you have thoroughly tested your trading system, you will need to get comfortable with using it. You can do this by paper trading until you feel you are ready to put real money in the market. Paper trading involves doing everything that your plan requires, with the exception of using actual money.

Some people will argue that paper trading is ineffective and a waste of time, as it misses out what is arguably the most important aspect of trading, and that is your emotions and reaction to the market. Certainly, when you start trading in earnest it will feel different from paper trading. However, that’s no reason to dismiss paper trading out of hand, as it will also make sure that you are familiar with how to follow your plan, and should also help convince you that the plan will make a profit.

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