Paper trading vs real trading: what is the difference?

What paper trading is good for

Practice accounts are a safe way to learn the parts of trading that are purely mechanical:

• How to place market, limit and stop orders without a costly slip.
• How position size, stop distance and risk fit together.
• How to read charts and test a method over dozens of trades.
• How a trading journal reveals your habits.

What it can't teach

When nothing is at stake, it is easy to hold a losing trade, to take huge positions, or to ignore your rules. Emotion changes behaviour. Fear and greed show up only when real money is involved.

Simulated fills are also kinder than reality. A practice account may fill every order instantly at the displayed price, while a real order can suffer slippage and delays.

How to get the most from practice

Treat the practice account as if the money were real:

• Write your plan first: entry, stop, target and size.
• Use a realistic account size, not a million.
• Keep a journal and review it weekly.
• Do at least a few dozen trades before judging a method.

When to move to real money

There is no fixed date. A reasonable sign is following your own rules for weeks while your risk per trade stays small and steady. Start with an amount you can afford to lose, and keep the stakes small at first because the emotional side is new.