Why Should I have a Paper Trading Account?

A Paper Trading account provides free access to trade virtual funds in a simulated environment. It allows you to learn how to buy and sell equities and options without taking any risk because you are trading on virtual funds.

Whether you are a novice investor or an experience trader, keeping a paper trading account is a great way to improve your investing and trading skills that you can apply to your real capital account.

Benefits of Paper Trading

Learn the Markets: although, market data is typically delayed in a paper trading environment, you can still gather great insights into the markets. Follow price action. See how bid/ask spreads vary across symbols and market conditions. Use charting studies and indicators to find correlations and patterns.

Learn Trading Mechanics: Trading platforms offers a variety of interfaces and ways to enter orders and manage your positions and risk. Practicing in a paper trading environment is a great way to learn the intricacies of your platform. There are multiple ways to enter a complex option order. You will be more comfortable trading your real cash after finding your preferred setup in paper trading.

Test Strategies: Have a hunch? Maybe you’ve been learning about technical analysis and want to try a new model. Testing your trading strategy in a paper trading account will help hone your approach without risking your hard-earned dollars. This is useful for first-time traders as well as seasoned options traders. Better to make mistakes and learn in a simulated risk-free environment than in your real cash or margin account. You can also test out option trading strategies to benefit from the volatility we’re experiencing in the markets, hedge your current stock positions or to generate additional income – the choice is yours.

Gain Confidence: Trading can be exhilarating but can also be stressful. Learn how to manage the stress and get comfortable trading a paper trading account. You can also trade a watchlist, and when you’re ready, you can open a live trading account.

Key Considerations

Price Slippage & Fills: Market and stop orders are typically executed at the displayed bid/ask prices in a simulation environment. Typically, paper trading platforms do not simulate slippage or partial fills. Live market orders can experience slippage and partial fills in the real world, cutting into anticipated profits. So, don’t be surprised if you experience differences in live trading.

Commissions & Fees: Well-built paper trading environments should include trade commission and fees charged in a live trading environment. Make sure you compare apples to apples when calculating P&L with true trading costs.

Use Discipline: Try to treat your virtual funds in paper trading as if it were your real money. This will help train your brain to deal with stressful situations when trading your real capital. Use trade annotation field to record your trade idea with trade exit plans.

Try out Paper Trading for free at eOption! It’s easy to sign up, and you’ll receive $100,000 of virtual cash to start testing out your strategies. Get started today at: https://www.eoption.com/pt-registration/

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eOption offers commission-free trading, a powerful & intuitive trading platform, mobile app, free trading tools & live expert support.

With Paper Trading at eOption, you can trade stocks and options with $100,000 of virtual cash. You can practice trading strategies risk-free and commission free, either on your computer or mobile app. You can also view option chains and probability calculator, actively monitor your simulated portfolio with streaming pricing, and create watchlists of your favorite companies and symbols. Access our professional research, news & daily insights for free, and customize the platform layout to your personal preference. Get started today! https://www.eoption.com/pt-registration/