Paper Trading
Run a trading bot on virtual capital with real-time market data (Paper Trading)—orders are not sent to the exchange and produce no real fills. Used as the last check after backtests pass and before going live; shares the same strategy and execution config with live trading.
Paper Trading runs "strategy + execution config" with virtual capital on live market data; orders are not sent to the exchange and there are no real fills or capital changes. Use it after the backtest passes and before going live to validate, learn the trading flow, and observe behavior. Creation and start-up work the same way as Live Trading (workflow)—pick Paper Trading when creating a trading bot. For concepts and flow see Trading Basics; for a mode comparison see Trading Modes.
What paper trading is for
| Purpose | Description |
|---|---|
| Strategy and config validation | Validates the strategy and execution config under live quotes and a real time series; the system simulates latency, slippage, and fees per the config, so results are closer to live than pure backtest |
| No capital at risk | No real-money losses; great for trying different parameters, pairs, or execution configs to pick and tune for live |
| Learn the flow | Get comfortable with creating bots, Trade Statistics, monitoring, and pause / stop before going live |
Recommended flow: Backtest → Paper Trading (1–2 weeks or more) → Small live. Consider Live Trading only after paper roughly matches the backtest and runs without anomalies.
Relation to live trading
| Aspect | Paper Trading | Live Trading |
|---|---|---|
| Capital | Virtual capital | Real capital |
| Fills | Simulated fills, no real orders | Real orders and fills |
| Risk | No capital at risk | Loss is possible |
| Quotes and data | Live quotes, simulated positions and P&L | Live quotes, real positions and P&L |
| When to use | After backtest, before live | After paper validation passes |
Paper and live use the same execution config (stops, targets, position, etc.); when switching from paper to live, keep the strategy, pair, K-line timeframe, and execution config consistent for comparison. See Trading Modes.
Configuration
When creating a paper-trading bot, set the following (same entry point as a live bot; only the mode is Paper Trading):
| Layer | Item | Description |
|---|---|---|
| Bot level | Mode | Pick Paper Trading |
| Bot level | Exchange and market type | Still required even for paper, so it stays consistent with planned live |
| Per pair | Strategy (signals) | Pick a strategy from the Strategy Library that has been created and validated via backtest |
| Per pair | Trading pair | We recommend keeping it the same as backtest and planned live (e.g. BTC/USDT) for comparison |
| Per pair | K-line timeframe | The execution main timeframe (e.g. 1H / 4H); keep it consistent with the backtest for attribution |
| Per pair | Execution config (risk) | Virtual initial capital, position, stop / target, max drawdown, scale-in, etc.; we recommend keeping these consistent with the execution config you plan to use in live |
For the full entry point and all configuration items see Live Trading (workflow). While paper runs, use Trade Statistics to inspect simulated fills and positions before deciding whether to go live.
Usage tips
- Run it long enough: at least 1–2 weeks, ideally across different market regimes, before deciding on Live Trading.
- Keep parameters consistent: keep the paper execution config aligned with the backtest and your planned live setup for easier attribution and comparison—see Execution Config.
- Stay realistic: paper can't fully replicate live liquidity, some extremes, or psychological pressure; good paper results are a strong signal for going live, but still start small with strict risk and keep monitoring.
- Use it long-term if you want: if you don't plan to go live, paper is a great long-term venue for validating strategies or learning the flow with no capital at risk.
Common questions
Is paper trading accurate? It uses live quotes with simulated fees / slippage, so it's closer to live than a pure backtest, but it can't fully simulate live liquidity, some extremes, or psychological pressure. We still recommend it as a mandatory step between backtest and live.
How long should I paper trade? At least 1 week, ideally 2–4 weeks; the longer the strategy's holding period, the longer the paper run should be to cover more K-line cycles. Consider live only when results are stable and roughly match the backtest.
If paper looks good can I go straight to live? Good paper is a strong signal to go live, but we still recommend starting small with strict risk, watching for a while, and only then scaling up. See Live Trading.
Can I run paper and live at the same time? Only on different pairs (or exchanges). One pair can only be managed by one bot, so the same pair can't run paper and live simultaneously; to keep both observation modes under the same strategy, create separate bots on different pairs. One bot can manage multiple pairs on the same exchange. See Trading Modes.
Next steps
- Live Trading (workflow) — Pick Paper / Live when creating a bot
- Live Trading — Live preparation and monitoring
- Trade Statistics — View simulated fills and statistics
- Trading Basics, Trading Modes — Concepts and mode comparison
- Risk Management, Execution Config — Risk and position configuration