Paper trading is a simulated market environment in which the participant writes down buying and selling decisions, rather than placing real orders at a brokerage agency. Paper trading is a type of simulation that allows people to use a “fictitious money account” to trade with zero risk. This is one of the main differences between paper trading and real trading: paper trading doesn't put real money at risk. A paper trading account will look the same as a regular real money account, but ultimately, trading doesn't offer real material gains or losses for the account owner.
One of the objectives of paper trading is to develop a trading system, resolve errors and observe how you react to changing market conditions. Committing to a sample of trades helps you avoid living and dying with your last trade and allows you to score in a variety of market conditions. Paper trading is a method of virtually testing configurations and strategies without putting real money at stake. So what's the point of paper trading? In essence, paper trading is done primarily for educational purposes.
After becoming disenchanted with the world of hedge funds, he created the Tim Sykes Trading Challenge to teach aspiring traders how to follow their trading strategies. The amount of time someone should spend before moving on to actual trading will depend on their experience and the hours they previously spent on a paper trading account. Remember that paper trading is often most beneficial when it comes as close as possible to live trading. This can help you prepare for live trading, delve deeper into research, and execute trades based on careful analysis.