What Is Paper Trading? Can you invest in it?

So finally, you are in the right place searching for paper trading. In this article, you will learn what paper money is and how it works. It will help you to know whether you can invest in it or not.

Have you ever heard of paper trading but are not familiar with it? To know what exactly is paper trading, follow this article. It will help you understand all the vital information about paper trading through different perspectives.

Paper trading is simulated trading that allows investors to practice without using their real money. Investors who try their hand at paper trading often use an online stock market simulator that looks and feels like an actual brokerage. If you plan to go for paper trading, it will be a good idea to understand all the aspects regarding it thoroughly.

What does paper trading mean?

Paper trading is simulated trading that allows the investors to practice trading before risking real money. In this process, beginners use paper trading to learn how to buy and sell. On the other hand, experienced traders generally use paper money to see if any new strategy can be profitable. This term dates back to when aspiring traders would practice on paper before risking money in live markets before the proliferation of online trading platforms.

Paper trading is usually free. It enables the investors to try their hand at buying and selling without fear of risking money. While learning, a paper trader records all trades by hand to keep track of hypothetical trading positions, portfolios, and profits/losses. Several online brokers offer clients paper trade accounts. Paper trading teaches novices how to navigate platforms and make trades, but it may not represent genuine emotions during actual market conditions.

Due to the fastest technology, the development of online trading platforms and software has increased the ease and popularity of paper trading. Today’s simulators allow investors to trade live markets without the commitment of actual capital, and the process can help gauge whether the investment ideas have merit. Some online brokers such as TradeStation, Fidelity, and TD Ameritrade offer clients paper trading simulators.

For example, TD Ameritrade’s PaperMoney is designed to help customers try options and different strategies without worrying about losing any money. Almost everything about a simulator is the same as their feature-rich thinkorswim trading platform, except the investor is not trading real money.

How does it work?

Paper trading works in a way by using a pencil and paper. It is the basic and most straightforward way. Before starting, investors can choose a stock and watch the market for an attractive entry point. However, simulated trading through an online platform that works like a real brokerage platform provides more tools and enables investors and day traders to test their strategies. Many free platforms have delayed security pricing, although some offer to trade in real-time.

Paper trading is generally free, although some platforms charge a subscription fee. There are so many platforms available that it might make sense to look for a free one. Portfolio simulators often set a starting balance of $10,000 or $100,000, which might be a more considerable amount than novice investors to invest.

Paper trading is an excellent way to learn how to trade options and many other assets, including foreign exchange, stocks, bonds, and exchange-traded funds. It also allows investors to select different order types. These orders include market order, limit order, stop-limit, or stop-loss order. It does this so they can test and learn how each one works.

Best paper trading platform

If you wish to start practicing paper trading, you should choose the best platform. Many online brokerages offer paper trading platforms. Each brokerage has different offers and requirements, so you must choose the broker that best fits your needs and situation. Check out the best broker platforms below:

Interactive brokers

Interactive Brokers is a comprehensive trading platform that gives you access to a wide range of securities at affordable prices. You can buy assets worldwide from the comfort of your home or office with access to over 135 global markets. Options, futures, forex, and fund trading are also available, and most traders are not required to pay a commission on any purchase or sale. IBKR is geared primarily toward experienced traders, but now, with the availability of free trades with IBKR lite, ordinary traders can also assimilate to IBKR’s offerings.

Interactive Brokers’ Trader Workstation (TWS) is one of the most advanced trading platforms you can find online for paper trading. It offers hundreds of tools for technical analysis capable of analyzing a wide range of markets and tradable assets. Interactive’s TWS paper trading virtual trading platform provides almost all of the features of the TWS platform and allows you to begin paper trading with $1,000,000 in virtual money. This platform is best for access to international markets, stocks, and ETFs.

It is a detailed mobile app that makes trading simple with a wide range of available account types and tradable assets. It comes with the advantage of fractional trading that allows investing regardless of share price and contains the industry’s lowest margin rates. Through this platform, you can earn more by lending your fully-paid shares.

Thinkorswim by TD Ameritrade

The thinkorswim trading platform by TD Ameritrade offers two different paper trading accounts. One consists of a standard margin trading account, and the other one is an individual retirement account that is more suitable for investors. These paper trading accounts come funded with $100,000 of virtual money. This platform is one of the most sophisticated option trading platforms. The people with paper trading accounts get access to most of the features of traders with live accounts.

Thinkorswim, the publicly listed discount broker, which has been in existence for over four decades, is service-intensive, offering intuitive and powerful investment tools. Especially with equity investing, a flat fee is charged with the firm claiming that it charges no trade minimum, no fees, no data, and no platform fees. It is more costly than many other discount brokers, but what tilts the scales in its favor is its well-rounded service offerings and the quality and value to its clients.

Undoubtedly, this platform is best for novice investors, retirement savers, and day traders. It comes with detailed research reports and an education center. Thinkorswim by TD Ameritrade is a world-class platform, and its assets range from stocks and ETFs to derivatives like futures and options. One bad thing about this platform is it has costly margin rates as its derivatives trading is more expensive than some competitors. Also, it can be overwhelming to inexperienced traders.


It is a platform of selection for many professional traders. Tradestation’s Go account offers new traders access to the most similar stock screeners and features of their professional platform, also available on their paper trading platform. This broker also provides extensive educational and developmental tools to help new traders excel in their trading.  TradeStation offers a wide range of tradable assets and charges $0 commissions on stocks and most EFTs.


TradeZero ensures that you can trade both on your desktop and mobile when searching for an online trading platform. Free trading options are available, and you can take advantage of low fees for other trades. 24/7 customer support and a secure platform that adheres to all federal standards are available. You can invest using a free app or move up to a pro account for $59 per month. There are powerful charting and technical analysis options, and you can even use free limit orders and no pattern trading rules to invest with the strategy you prefer.

Best paper trading app

To find a paper trading app that meets your needs, you need to look at more than just the demo facility. Choose the app wisely; after all, you are looking for something you eventually plan to use for actual money trading. Consider essential metrics such as trading tools and features, fees, commissions, spreads, supported payment method, minimum deposit amount, tradable assets, regulation, education, and research materials. Check out the paper trading apps below:


eToro is overall the best trading app available in the market. This paper stock trading app can be downloaded free of charge on iOS and Android devices. All you have to do to start is open an account, and that’s it. You will be offered a paper trading balance of $100,000. It is more than enough for you to learn the ins and outs of how online trading works. In terms of what you can trade, eToro offers the most asset classes. You can buy shares, ETFs, and cryptocurrency’s indirect ownership.

If you are a keener or short-term strategist, eToro also offers CFDs. It covers many of the best stocks, digital currencies, indices, forex, commodities, and interest rates. The provider does not charge commissions regardless of what you can trade on the eToro app. It means that if you eventually get around to trading with your capital, you will be able to do so in a super cost-effective manner.

While going back to the demo account facility momentarily, it is essential to note that this mirrors live market conditions. Whatever you see on the paper trading platform is mirrored like-for-like with accurate eToro buy and sell orders. This ensures that you get the most from your paper trading endeavors. This platform requires a minimum deposit of just $200, which you can find with a debit/credit card, e-wallet, or bank transfer.

eToro is a trusted brand with over 12 million accounts worldwide. It comes with social and copies trading features and trades with leverage. A great thing about this app is that it has a personalized eToro account to set up trading price alerts. On the other hand, this platform is unsuitable for advanced traders who like to perform technical analysis. should be at the top of your list if you want to trade cryptocurrencies. In this case, you will be trading this asset class via CFDs, and you will be accustomed to a range of benefits. For example, all UK and European traders can apply the leverage of 1:2 while trading cryptocurrencies at A balance of 500 euros would permit the trade worth 1,000 euros. Higher leverage limits are available on other asset classes that include 1:20 on gold CFDs and 1:30 on major forex trading pairs.

You will also have the option of placing a buy or sell order on your chosen market, which means that you stand the chance of profiting from rising and falling prices. In supported instruments’ terms, offers both fiat-to-crypto and crypto-cross pairs. This app charges a 0% commission on all asset classes. It contains an excellent selection of currency pairs and is FCA-regulated. Its deposit just starts from $20 and is a clean and crisp mobile app. This app is 24/7 trading and has the advantage of industry-leading spreads.


It was only until recently that options became accessible for the average trader. They are a kind of complex financial instrument best suited for experienced investors. Nevertheless, using a paper trading app like Avatrade, you can learn how options contracts work without risking a single cent. In particular, the app gives you access to options in the form of forex and gold. This is a great way to gain exposure to your desired marketplace in a low-risk and high reward manner. You can trade calls, spots, and puts and quickly deploy combination strategies.

AvaTrade automatically reduces spreads when you utilize a combination strategy to trade options. It also means that the app is conducive for hedging as your trading costs are kept to an absolute minimum. The AvaTrade app also hands out for its provision of risk management tools. It includes a lot of market orders, portfolio simulation, and the ability to trade with small stakes.

This app can be easily downloaded free of charge and is compatible with iOS and Android devices. If you wish to upgrade a real money account, AvaTrade requires a deposit of just 100 euros. You can facilitate it with a debit/credit card or bank transfer. This app is best suited for more experienced traders. It comes with thousands of financial instruments supported. One great thing about this app is: it is regulated in several jurisdictions and is excellent for news market insights, and has low account minimums.


If you are searching for ways to buy and sell currency pairs through your paper trading app, you should consider the FXCM forex app. This platform has an excellent reputation in the online and mobile trading scene, especially regarding forex. You can access many currency pairs, including plenty of majors, minors, and exotics. You can not only access these forex pairs without paying a single cent in commission, but spreads are very competitive.

Every single pair can be traded on leverage, too. Your limits will always depend on where you are based, which currency pair you decide to trade and whether you are a retail or professional client. When it comes to a paper trading app itself, this comes pre-loaded with a $20,000 balance. You can use this on any asset class of your choosing: forex or CFDs. You will also find the option of trading via MT4 at FXCM.

Once you open an account, you simply need to download the MT4 app onto your phone and log in with your FXCM credentials. It is well worth considering, as MT4 provides many tools and features, including deploying automated trading robots. If you wish to upgrade to a real money account, FXCM requires a minimum deposit of $360. If you are located outside the UK or EU, it will be $50. This platform’s supported payment methods include a debit/credit card, bank wire, or e-wallet. The FXCM app is super safe, including a full-fledged license with FCA.

This app comes with many benefits, such as it contains lots of currency pairs to trade and supports EAs and forex robots. You can choose from several trading platforms, including MT4. Also, it has 0% commission on all assets and has tight spreads.

What is a paper trading simulator?

A paper trading simulator is computer software that reproduces the behavior and features of a stock market so that a user may practice trading stocks without financial risk. A trading simulator, known as a “paper simulator,” is hosted on a virtual trading platform. It lets users experiment with new stocks, alternate investment strategies, and other stock market mechanisms without risking the actual money. Paper trading simulators allow investors to practice buying and selling securities.

The paper trading simulator prepares students to trade live with brokers like Capital markets elite group or lightspeed. You can test a new investment strategy in paper trading before employing it in a live account. It is a simulated market environment where the participant writes down buying and selling decisions rather than placing actual orders at a brokerage.

If you are a beginner, you should not trade with real money until you have proven that you can be successful in a simulated environment. If you are a student and can’t generate profits in the simulator, you should not be trading with real money.

What is paper trading on Webull?

Paper trading on Webull is a function that allows people to start trading without making an initial investment. These account types have become popular, particularly among those individuals who are just entering the industry. The function is available on the desktop and mobile platforms offered by Webull, allowing you to initiate practice trading instructions from anywhere. The paper trading platform is linked to the entire Webull system and can be activated once a new account has been created.

You may continue to practice and move over to a real account at any time. Paper trading on Webull has numerous benefits that its account offers people new to this activity. Beginners may not be familiar with it but opening an account is easy and quick, with no need to make an initial deposit before the account is deactivated. This platform comes with a wide range of educational materials that beginners learn about different trading strategies.

In addition, there are no risks involved. Many beginners lose their money when they start trading. With a paper trading account, losing cash relates to the virtual account and not a balance linked to real money. The very first-hand experience also serves as an essential practice for the individual.

Webull is a good platform for professionals too. The paper trading account offers a professional the opportunity to test the platform and compare it with the current broker used without investing. Professionals can test out different strategies they are working on with a paper trading account, reducing the risks if the plan doesn’t seem to work.

Do you make money on paper trading?

As far as technology goes, it is getting easier to earn money. So the answer is Yes! You can make money on paper trading while entering competitions, despite your trades being based on hypothetical currency and assets. In addition, paper trading can help you master various trading strategies, thereby helping you to make more money on your paid investments over time.

Most money in paper trading is hypothetical; the time spent is a wise investment, particularly for novice investors because the app makes it easier to master complicated concepts. This mastery helps you enhance your investment portfolio’s profitability over time. Also, paper trade competitions offer financial rewards and other incentives for investors who need the extra incentive.


Paper trading is the best way for investors to practice without losing their actual money. Especially if you are new to the industry, you should begin with paper trading. Choose the platform that best fits your needs. Even if you are an experienced investor, you can try different strategies to see which one is more profitable. You can make money on paper trading as well. Look for the best platform.