Why do you need paper trading to make a profit in Forex

When you want to master your trading skills and/or sharpen your market wisdom without damaging your account, probably the easiest and safest method is paper trading. This word combination assumes opening and closing deals abstractly (a.k.a. on paper), following the real price movements, and getting a hint on how much money you would win or lose would you trade for real.

In its classical way, paper trading requires the simple ingredients which you most certainly already possess:

• pen
• paper
• your brain calibrated for calculating
• access to the market chart

Ironically, it is pen and paper from this list that are replaceable. For example, you can use spreadsheets to sort your notes for more detailed paper trading. Even paper trading programs are at your disposal which we will touch on a bit later in this message.

Surprisingly, such an accessible way to manage your trading skills has numerous advantages, as well as baddies, so let’s cover all these fellas and see if this way of practicing suits you best.

Pros of Paper Trading

Here’s why paper trading is definitely a must-do thing for your development as a trader:

• No real losses. Let’s take the elephant from the room and start with the most obvious benefit which makes paper trading accessible to almost everyone.
• Gaining experience. Whether you’re only starting trading or just want to test your newly crafted strategy, it’s awesome to know that paper trading helps you to acquire the necessary experience. Combine this with the previous point, and you’ve got a powerful combination to tilt the scales for the benefit of paper trading.
• Tranquility. Develop your trading confidence without any pressure. You won’t make a hasty decision since you receive no stress simulating trading with abstract money. Making weighted choices can certainly set up your confidence before the real market.

Cons of Paper Trading

To brace yourself and get the most from paper trading, it is essential for you to be aware of all the pitfalls that this way of practicing has in store:

• Overvalued optimism. The benefit of not losing money may be too heavy for an unprepared mind. It is easy to get into the loop of opening deals of unbearable risk ‘left and right’. So you got to remind yourself that all this is not a game but a preparation for the main stage and you can risk only with those amounts that you can actually afford.
• Unexpected price shifts. What goes well on paper does not always go as smoothly in reality. During paper trading, you may miss the slippage which sometimes takes place in the market. It may be caused by a sudden change of the spread and result in you spending more money than expected.
• Scratching only the tip of the iceberg. There are so many processes happening in the market affecting the market behavior that paper trading can’t address. It gives a false sense of simplicity.

Today there are more ways for paper trading than just involving actual paper. Various brokers offer a demo account that works in a similar way, as well as has quite the same pros and cons. Besides, either of these methods saves your time which is an extremely overlooked resource.

You open and close deals with the same tempo as you will eventually do in real trading which is far slower than you need to. If only there was a way to speed up the practicing… Oh wait, there is one.

Paper trading software

Experienced traders managed to turn their knowledge into a comfortable way for beginners to boost the experience. We talked about paper trading saving your money and nerves but now let’s talk about saving tons of time as well. You can’t stick to trading with metaphorical money forever, right? (unless you’re alright with metaphorical food) So you need to get skills as quickly as possible. Try Forex Tester. It replicates the market environment and uses the real historical data of the market behavior.

You can easily open and close deals on multiple charts simultaneously and control the time. Fast-forward the market and get right to the result. If you feel it can be better, go back in time, adjust your strategy and try again. And the beautiful thing is that you can do it as much as you need! Even more beautiful thing is that you can get the latest version of Forex Tester for free.

Download the free demo of Forex Tester and make your practice as swift and effective as it should be: