Trading Modes
The difference between execution mode (live / paper) and trading mode (Strategy, AI-Driven, News & Event-Driven); how to pick by stage and risk appetite—paper first, then live.
Pluto's trading system spans two orthogonal dimensions: execution mode (live / paper) and trading mode (Strategy Trading, AI-Driven Trading, News & Event-Driven Trading). They are independent: any trading mode can run in either live or paper.
Concept distinction
| Dimension | Meaning | Options |
|---|---|---|
| Execution mode | How capital and orders are handled: real vs. virtual capital, and whether orders are actually sent to the exchange | Live Trading, Paper Trading |
| Trading mode | How buy / sell signals are produced—i.e. who decides when to buy and sell | Strategy Trading, AI-Driven Trading, News & Event-Driven Trading |
You pick the execution mode when creating a bot; the trading mode decides how that bot generates signals. All three trading modes can run in either live or paper and share the same risk and execution-config concepts.
Execution mode: Live vs Paper
| Mode | Description | Use when |
|---|---|---|
| Live Trading | Real capital, real orders on the exchange, real P&L; requires Exchange Config connection and API; the system runs by per-pair execution config and risk controls | Strategy and execution config validated via backtest and paper; risk and psychology in place; start with small capital |
| Paper Trading | Virtual capital with live quotes; no real orders sent to the exchange; the system simulates fills and positions per strategy and execution config | Validate after backtest, learn the flow, or test new parameters; no capital at risk |
Both modes use live quotes and share the same execution config (stops, targets, position, max drawdown, etc.); the only difference is whether the capital is real and whether orders actually go to the exchange.
Trading mode: three decision sources
| Trading mode | Signal source | Description |
|---|---|---|
| Strategy Trading | Buy / long & sell / short conditions preset in the strategy | Signals come from indicator conditions in the strategy; backtestable—see Strategy Basics |
| AI-Driven Trading | The AI weighs the market and context to time entries / exits | The AI decides when to buy / sell—see AI-Driven Trading |
| News & Event-Driven | The AI parses news, sentiment, or macro events into signals | Entries / exits triggered by news / events—see News & Event-Driven |
All three trading modes share the same execution config (position, stops, targets, etc., set per pair); the only difference is "who decides when to buy and sell".
All three can run in live or paper; we recommend validating in paper first, then switching to live.
Bot and pair relationship
- One pair can only be managed by one bot: The same pair on the same exchange cannot be managed by multiple bots at once, or execution can conflict.
- One bot can manage multiple pairs on the same exchange: When creating a bot you can bind multiple pairs; that bot runs the strategy and risk control for all of them.
So to run a strategy on multiple pairs, create one bot per pair or one bot for multiple pairs (per system support); each pair belongs to exactly one bot.
Paper vs live
| Aspect | Live | Paper |
|---|---|---|
| Capital | Real; P&L is real | Virtual; no capital at risk |
| Orders | Sent to exchange | Not sent; system simulates fills |
| Quotes and data | Live quotes, real fills and positions | Live quotes, simulated fills and positions |
| Execution config | Same set as paper (stops, targets, position, etc.) | Same set as live |
| When to use | After backtest and paper validation | After backtest, before live, or for ongoing testing |
Paper and live can coexist, but one pair can only be managed by one bot, so the same pair cannot have both a paper and a live bot at the same time; use different pairs (or exchanges) for paper and live bots. When switching from paper to live, keep the pair, timeframe, and execution config the same as in paper for comparison and attribution.
Choosing a mode
- By stage: Right after backtest → run paper for 1–2 weeks; when paper is in line with backtest and stable → consider live with small size. Don’t skip paper and go straight to live.
- By risk tolerance: if you can't take real losses or you're still experimenting, use paper; in live, set stops, position, and max drawdown strictly—see Risk Management, Execution Config.
- By size: Start live with small size (e.g. 1000–5000 USDT), then increase gradually after it’s stable; avoid putting too much in at once.
Recommended flow: Backtest → Paper (1–2 weeks) → Small live (about 1 month) → Increase size or add pairs based on results.
Switching and running both
- Paper → live: when creating a bot in Live Trading choose Live Trading, or switch an existing paper bot to live (if supported). Keep the strategy, pair, timeframe, and execution config the same across the switch; before going live, confirm Exchange Config is added and the API permissions are correct.
- Paper and live together: one pair, one bot, so a pair can't run paper and live simultaneously; to keep both under the same strategy, create separate bots on different pairs (or exchanges) for paper and live, and keep capital and risk settings clearly separated.
Usage tips
- Paper before live: after the backtest passes, run Paper Trading for a while before switching to Live Trading to keep trial costs down.
- Consistent config for attribution: use the same strategy, pair, timeframe, and execution config in paper and live so any difference is clearly traceable to market vs. mode / parameters.
- Pre-flight check: confirm the execution config and risk management settings are sensible and the exchange / API are working before starting live.
Common questions
Paper results are very different from the backtest, what should I do? Paper uses live quotes and simulated fills, which differs from the historical environment in backtest; if the gap is large, check whether the execution config matches the backtest and whether slippage and fee assumptions are reasonable, then watch a bit longer. If it keeps diverging, reassess strategy or parameters.
Can I only use paper and never go live? Yes; paper can be used indefinitely to validate strategies, learn the flow, or test parameters with no capital at risk.
Can one bot run both paper and live? Depends on the system; usually you choose mode (Live / Paper) when creating or editing the bot, and one bot has one mode. To compare, create separate paper and live bots for different pairs; one pair, one bot, but one bot can manage multiple pairs on the same exchange.
Next steps
- Live Trading (workflow) — Pick the execution mode (Live / Paper) and trading mode when creating a bot
- Strategy Trading — Live preparation and monitoring under strategy rules
- AI-Driven Trading — Entry / exit timing decided by AI
- News & Event-Driven Trading — Signals driven by news and events
- Paper Trading — How to use Paper Trading
- Trading Basics — Execution concepts and flow
- Risk Management, Execution Config — Risk and position configuration