Paper trading is practising trading with fake money. You place orders in a simulator that tracks real market prices, so you can learn a platform, test rules and build habits without risking a dollar. It is free on TradingView, on thinkorswim’s paperMoney and with an Interactive Brokers paper account.
The goal is not a high score. It is a process you can carry into a small live account: realistic balance, fixed risk per trade, every trade logged. This guide covers the setup, the free platforms, a worked $10,000 example, a sample paper-trade log, and a concrete test for when to go live.
How to practice trading with fake money (step by step)
- Pick a free simulator that matches the market you will trade live — stocks, options, futures, forex or crypto. A stock-only game will not teach you futures fills.
- Create the paper account and reset the starting balance to your intended live size. Defaults of $100,000 (TradingView, thinkorswim) or $1,000,000 (Interactive Brokers) teach the wrong sizing habits.
- Write three rules before the first order: the setup, the stop, and the maximum risk per trade (usually 0.5–1% of the account). If you cannot write the stop, do not place the order.
- Size from the stop, not from a round lot. Use a position size calculator so dollar risk stays the same whether the stop is $0.40 or $2.00 away.
- Use the order types you will use live — limit, stop and bracket orders. Instant market fills in a simulator hide slippage.
- Log every trade the same day in a trading journal: setup, planned vs actual, and whether you followed the plan. Paper P&L without notes is a video-game score.
- Review in blocks of 20–50 trades before changing any rule. One lucky week is not a sample. Judge the block by win rate and expectancy, not by its best trade.
Practice on the platform you expect to use live when you can. Switching from a simulator to an unfamiliar broker the week you go live adds a second learning curve on top of real-money stress.
Free paper trading platforms
All four let you trade with fake money at no cost. Pick the one that matches how you will trade live, not the one with the nicest leaderboard.
| Platform | Best for | Fake money | Catch |
|---|---|---|---|
| TradingView Paper Trading | Quick start on the charts you already use; stocks, forex, crypto, futures | $100,000 by default; you can reset or open accounts with a different balance | Simulated fills; nothing is routed to a broker |
| thinkorswim paperMoney (Guest Pass) | Stocks, options, futures and forex on the platform you would use at Schwab | $100,000 of virtual buying power | Guest Pass lasts 30 days and cannot be extended; no Schwab account needed for it |
| Interactive Brokers paper account | Futures, options, global stocks and the full TWS order set | $1,000,000 simulated buying power | Requires an approved IBKR account first |
| Investopedia Simulator | Absolute beginners; no brokerage application | Virtual cash, no deposit | Stock-game style; weak for futures and options mechanics |
TradingView in three clicks: on any chart, click Trade in the top-right corner, choose Paper Trading from the broker list, then Connect. Before your first order, reset the balance to the amount you actually plan to fund.
If you already know your broker, practice on that broker’s demo so the buttons match. Once you journal the results, the supported brokers list shows which platforms can import fills automatically.
A worked $10,000 example
Say you plan to fund $10,000 and risk 1% per trade, which is $100. You see a long setup at $50.00 with a stop at $48.00, so the risk is $2.00 a share.
- Position size = $100 ÷ $2.00 = 50 shares — not 100 because it is a round number.
- If the stop were $0.50 away, the same $100 risk would be 200 shares. The dollar risk stays fixed; the share count changes.
- In the log: setup name, planned stop, actual fill, and whether you moved the stop.
Repeat this on the position size calculator until it is automatic, and write the 1% limit into your plan as a rule — see risk management for traders.
What a paper-trade log should look like
Here is an illustrative block of eight paper trades on the same $10,000 account, each risking $100 (1R). The “Plan followed?” column matters more than the P&L column.
| # | Setup | Result | R | Plan followed? |
|---|---|---|---|---|
| 1 | Opening-range breakout | +$150 | +1.5R | Yes |
| 2 | Opening-range breakout | −$100 | −1.0R | Yes |
| 3 | Pullback to VWAP | +$220 | +2.2R | Yes |
| 4 | Opening-range breakout | −$100 | −1.0R | Yes |
| 5 | Pullback to VWAP | −$140 | −1.4R | No — moved the stop |
| 6 | Pullback to VWAP | +$90 | +0.9R | No — exited before target |
| 7 | Opening-range breakout | −$100 | −1.0R | Yes |
| 8 | Pullback to VWAP | +$200 | +2.0R | Yes |
Totals: four winners out of eight (50% win rate), +$220 or +2.2R, an average of +0.275R per trade. Without the moved stop on trade 5 the loss would have been −1R, and the block +2.6R. One broken rule cost 0.4R — on fake money, which is exactly where you want to find that out.
If your simulator does not charge commissions, subtract realistic ones in the log so the paper results are not flattered.
When to go live
There is no fixed number of weeks. Use evidence instead. A reasonable bar before you fund a small live account:
- At least 50 trades on one unchanged set of rules.
- Plan followed on 90% or more of them.
- Positive expectancy after realistic commissions across the whole block, not just the last week.
- A worst losing streak you could live with at your real size. If eight losses in a row at 1% would make you quit, size down.
Then start live at a fraction of your paper risk — for example 0.25–0.5% per trade — and keep the same journal. Real money adds emotions the simulator cannot, so expect your adherence score to drop at first and watch it closely.
Paper trading vs live trading
| Aspect | Paper trading | Live trading |
|---|---|---|
| Risk | No money at risk | Every trade affects real capital |
| Pressure | Low; easy to follow the plan | Fear and greed push you off the plan |
| Fills | Usually instant at the quoted price | Slippage, partial fills and queue position |
| Costs | Often none unless you add them | Commissions, fees and spreads |
| What it teaches | Platform mechanics, rules, sizing, routine | Emotional control and real execution |
The leap from paper to live is mostly psychological. That is why the log should record how you felt and whether you followed the plan, not just the result.
Common mistakes that make paper trading useless
- Keeping the default balance. Sizing habits learned on $100,000 or $1,000,000 do not transfer to a $5,000 account.
- Oversizing because it is not real money. A position you would never take live teaches you nothing.
- Overtrading because there are no fees. Dozens of low-quality trades build impulsive habits.
- Using market orders everywhere. Instant simulated fills hide the slippage you will pay live.
- Not journaling. Without notes you cannot tell a good process from a lucky week.
- Judging the practice by P&L. The score that matters is whether you followed your rules.
Frequently asked questions
How do I practice trading with fake money?
Open a free paper account such as TradingView Paper Trading or a thinkorswim Guest Pass, set the virtual balance to your intended live size, write your stop and a 1% risk limit before each trade, and log every trade. That is paper trading.
Does paper trading cost money?
No. TradingView Paper Trading, thinkorswim’s Guest Pass and IBKR’s paper account are free. IBKR requires an approved account first; the thinkorswim Guest Pass does not require a Schwab account but expires after 30 days.
Is TradingView paper trading free?
Yes. Connect Paper Trading from the Trade panel on any chart. There is no deposit, and you can reset the $100,000 default to a realistic balance.
How long should I paper trade before using real money?
Until you meet an evidence bar rather than a date: about 50 trades on fixed rules, the plan followed on at least 90% of them, and positive expectancy after costs. For some traders that takes a month; for others, much longer.
How accurate are paper trading platforms?
Prices are real — TradingView tracks live quotes, and Schwab describes paperMoney as using real-time simulated market data. Fills are the weak point: simulators usually fill at the quoted price, while live orders face slippage and partial fills. Treat paper results as a best case.
Can I paper trade futures, forex and crypto?
Yes. TradingView’s simulator covers stocks, forex, crypto and futures; thinkorswim’s Guest Pass covers equities, options, futures and forex; IBKR’s paper account covers most of what IBKR offers live. Practise on the market you plan to trade.
Related reading
- Position size calculator — size fake-money trades from the stop
- How to calculate win rate — score a 50-trade paper sample
- What is backtesting — test rules on history before paper trading
- What percentage of day traders are successful — why practice alone is not enough
- Why every trader needs a trading journal — log paper trades like real ones
Start journaling with TradeReview for free — track paper and live trades in one place.