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Paper trading

Definition

Simulated trading with no real money at risk.

Why it matters

Useful for learning mechanics, misleading for psychology, because the emotional cost of a real loss is what changes behaviour.

Example

A strategy that produces 1.6 profit factor on paper commonly lands near 1.2 live, because paper fills ignore queue position, slippage and the hesitation of real money.

How to track it in a journal

TradeStack calculates the core performance numbers — win rate, average win and loss, profit factor, expectancy, drawdown and consistency — automatically from imported trades, so paper trading stops being something you estimate and becomes something you read.

Related terms

Overtrading
Taking more trades than your plan justifies.
Revenge trading
Taking a trade to recover a loss rather than because the setup appeared.
FOMO
Entering late because a move is already running without you.
Tilt
Trading while emotionally compromised after a loss or a big win.

Questions that use this term

Keep reading

Trading journal guides
Expectancy, profit factor, drawdown, backtesting and the PDT rule.
Free trading calculators
Position size, risk-reward, expectancy and options profit.
Expectancy calculator
Expected profit per trade from your own numbers.
Broker CSV export guides
Step-by-step exports for Tradovate, NinjaTrader, IBKR and more.
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