Paper trading

Paper trading means trading with virtual money on live market prices. Orders are simulated instead of sent to an exchange, but the prices, and ideally the rules, are real. The name comes from the days when traders wrote their practice trades down on paper.

Why it matters

A backtest shows how a strategy did on the past. Paper trading shows how it behaves now, in the current market, with signals arriving in real time. It catches problems a backtest cannot: a strategy that only worked in an old market regime, settings that trade far more or less than expected, or rules that behave differently on live data.

It is also the safest way to learn how a bot works, how its stops and exits behave and how its results are reported, before any money is at risk.

Its limits

Paper fills are simulated. Real orders can fill at different prices, partly, or not at all, and real money brings emotions a simulation does not. Paper results do not guarantee live results, but a strategy that fails on paper rarely does better live.

On Algonney

Paper bots trade virtual USDT on the chosen exchange's own live prices, with its rules for fees, order steps, leverage and risk tiers. They run on the same engine, sizing, stop loss and guard rules as live bots and need no exchange key. When you are ready, a paper bot can go live through a readiness review and your confirmation.

Related: backtesting, Paper trading and Live trading.