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In this guide, we’ll talk about what paper trading is, how to do it and highlight the pros/cons.
Key points about Paper Trading
- Paper trading is a form of simulated trading that gives traders to opportunity to practice the act of buying and selling assets
- It can be used to simulate the trading of anything from cryptocurrencies, forex, stocks to commodities and more
- Paper trading used to be done on paper but is now more commonly done online
What is Paper Trading?
Paper trading is the act of simulating the trading of cryptocurrencies, stocks, forex, commodities and more to learn the process before risking capital. It is something every trader should try at least once as it provides you with a completely different view of the market.
How to do Paper Trading
Paper trading is simple to do, there are a lot of brokers who offer it for stocks and forex. It involves the same processes as normal trading except the only difference is that you are not actually risking money.
You can either paper trade on physical paper or online with some brokers.
Step 1: Open an account with a broker who offers paper trading
Step 2: Select paper trading
Step 3: Join Blockduo trading room and get started learning all about trading with your simulated account
Step 1: Get a small notebook or book
Step 2: analyse the markets and decide at which price you are buying, selling and placing a stop loss
Step 3: Watch the trade play out and journal the results (win? what went well? what could’ve gone better?)
Step 4: Join the LIVE Blockduo trading room and learn more about trading
The pros & cons of Paper Trading
- No capital at risk
- Learn trading techniques for free
- Not the same as real trading, less emotion, people tend to trade very differently when actual capital is at risk
- Doesn’t represent real-life market conditions
- Physical paper trading can be time consuming and difficult to keep track of