If you are new to the trading , it is very important to understand the market . But in this situation understanding market means loosing your hard earned money . So there is a way by which you can learn trading and take market experience without investing your money , this is called Paper Trading .

Introduction to Paper Trading

Paper Trading is a method of buying and selling stocks without putting real money for learning purposes . It is a trading simulation because you get experience and knowledge by staying away from the market . Paper trading platforms create such a enviroment that you do not feels like Simulation . Trades placed during this time will not create any changes in real market . The word ‘Paper Trading’ refers to old time when there was no trading softwares , so people use pen and paper and predict the movement of market .

When to use Paper Trading ?

1. When you are completely new to the market and you want to learn trading without putting real money.
2. If you are experienced in market but you want to learn new trading strategy then you can use paper trading .
3. When you are trading in one market suppose stocks and you want to go into crypto so you can use paper trading.
4. If you have lost your confidence so you can use this to regain your confidence.

 

Advantages of Paper Trading

1.  The main advantage of paper trading is there is no risk of loosing money.
2.  No real money involve in trading so there is no stress .
3. You can master any trading strategy by doing paper trading.
4. You will gain more confidence and knowledge .
5. There is brokerage ,you can take unlimited trades.

Disadvantages of Paper Trading

1. No real money involves so people dont experience real risk factor.
2. Some people gets overconfident ,so when they come in real market they make losses.
3. Due to habit of paper trading ,they forget about brokerage and other charges.