What is paper trading ?

trading ninja paper trading

Being a beginner you can’t just jump into the markets straight , of course some might ask you to start trading from day 1 as you learn the strategies but as per me the best technique is to start with paper trading because there is no chance of losing money while you are learning to trade so it doesn’t demoralize you from day 1 , of course you should get a demat account but you should not start trading live from day 1 , give yourself a buffer , devise a strategy that suits you and get an edge , then when you have tested the water by implementing your strategy using paper trading you can jump right into the markets.

Just make an excel file , write down what stock you want to trade , its buying or shorting price , why you bought it i.e what signals you got from charts , your stop loss and target , after doing so wait for the market to do its thing , wether marker moves into your favour or not write down the same in excel , repeat this paper trading method for atleast 50 trades if at last you have a decent win ratio of 60-70% you can definitely go and trade the markets live , paper trading might not make you psychologically strong to face the losses but it gives you a wonderful immunity to test your strategy , checking a startegy in live market can attract huge losses , hence paper trading is recommended not just for newbies but also for people who want to develp new startegies without losing their profits from previous trades.

But don’t forget to make a trading journal , even if you are trading live you need to make a trading journal in order to properly manage your trades and startegy and to implement any changes with the changing dynamics of the market.