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Traders' Insights: Paper Trading vs. Real Trading
Hi, mooers!
How's everything going? We are coming back with the new column "Traders' Insights", where you can easily find mooers' in-depth trading ideas. Ready for it? Let's get started!
We are glad to receive your impressive comments from the discussion: #Can paper trading help you get a better outcome in stock trading?. According to the voting results, 56% of mooers believe that paper trading is no different from real trading. A little bit surprising, right?
Do you want to know what mooers think about paper trading? Just follow our paths and scroll down!
1. Paper trading is suitable for both new and experienced traders
As @Koolgal said, "Paper Trading is an important prerequisite for beginners to get familiar with the nitty gritty of investing". Many experienced traders utilize paper trading when developing new ideas and approaches. It allows them to test strategies without risking real funds.
2. The benefits of paper trading
Paper trading can help us build confidence before real trading and improve our overall trading knowledge. Many mooers suggested that we need to "treat it like a real account" and then switch from paper trading to real trading.
@David W Clark: "Paper Trading must be treated just like it was your real money being used. You have to think of it that way to learn what can happen when trading good and bad and learn from all of it. It can also treat your fears of making a mistake and get you over that hump."
Paper trading allows traders to make forward testing. @doctorpot1 shared how to use paper trading to test the following hypotheses on moomoo.
Hypothesis 1: With safer stock that doesn't have extremely high volatility, it won't create extraordinary gains.
Hypothesis 2: Buy stocks with prices that made absolutely no sense.
Hypothesis 3: If it is profitable to do swing trading.
Hypothesis 4: Can we all in and support moomoo?
3. Paper Trading vs. Real Trading
@Blessedme emphasized that the main difference between paper and real trading is time and emotion.
"The time you bought stocks on the actual trading platform determines the profit or loss which does not reflect my P/L in my Paper Trading...When the price dropped during actual trading, you will be anxious and have to make decisions to buy or sell. In Paper Trading, it does not carry the same emotions as Real Time Trading."
Besides, we may ignore the state of the stock market and key information during paper trading, thus lacking real emotion.
@cola1010: "the paper trading does not show the actual condition where the real trading will be affected by hidden costs like price slippage, commission, and trading fees with brokerages. As not real money involved, the investor might not feel the pain if loss of money, it might be different when making the decisions when trading for real."
4. Does paper trading always work?
Some mooers reminded that the usefulness of paper trading is "a double-edged sword". @Yogiyogi showed an interesting view: Paper trading is a game. If spending too much time on paper trading, we would just feel like flying real as below.
Time to be rewarded for your great insights!
This week, we'd like to invite you to comment below and share your ideas on:
How do you take the First Step to overcome trading fears and build confidence?
We will select 10 TOP COMMENTS by next Monday. Winners will get 200 points by next week.
Top Comment Technique: Personal Trading Experience & Any bright insights or knowledge
Disclaimer: This presentation is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Investment information provided in this content is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. It is provided without respect to individual investors’ financial sophistication, financial situation, investment objectives, investing time horizon, or risk tolerance. You should consider the appropriateness of this information having regard to your relevant personal circumstances before making any investment decisions. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. The testimonial provided herein may not represent other customers' experience, and there is no guarantee of future performance or success. Tap for more details
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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杰曼 : yes, paper trade gives a glimpse of insight whether your stock selection based on your research, study, foresight, or even luck, a boost of confidence to play and invest the real money in stock market.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
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Emotionless : Paper trading has given me some confidence in a strategy i use. About 3 months ago i started a paper account with what i would be able to invest with which was 2500 dollars .. my account is now up to 202,737,345 and i use the same strategy daily and have lost on only a handful of trades ..so as soon as i get 25,000 to be able to day trade i won't know till then how accurate the paper trading is. The day trading rule should be abolished. it doesn't help retail or new traders it only hinders them and leaves them holding bags and forced to hold a stock and loose money. Its all rigged and manipulated and i cant wait to see those that are involved get it handed to them. first thing im gonna do when i hit big is retain the best investing law firm and go after every fud spreading shill clown and the pump and dumpers for costing me money by their part in the manipulation . So here me now clowns put a little bit back with my name on your piggy banks and ill get it soon .
Investment Tryhard Emotionless : Can you share your trades live? I want to learn from you and grow my account too
Ziggz420 : I'm also saving up to day trade only $19k to go
tony123456 : There is still a big gap between virtual trading and real trading, that is, your attitude towards it is not the same
GenuineSarcasm : How do you take the First Step to overcome trading fears and build confidence?
There are many different ways to answer this, as it depends on your specific fear. There isn't much you can really do about the volatility of the stock market, for example, but learning about trends and how to analyse charts can help you to better understand the probable outcomes.
I've been investing in a few penny stocks—stocks that sell for fractions of a dollar. Some general advice if you're going to go this route is to look at the statistics of the stocks you're considering—I always note the 52wk High and 52wk Low, as well as the Historical High, in addition to the current High and Low, since that's a pretty decent indicator of the bounds you can reasonably expect. I don't put any money into penny stocks whose 52wk High is only three times as much as its 52wk Low; it's not worth it, in my opinion.
Something people need to understand about the market is that it's a cyclical process—there will always be rebounds, so you need not panic if you buy and the price drops. Even so, to mitigate that potential loss, I typically buy shares in small amounts, around ten or twenty at once, specifically so I have money to buy more if the price goes down even further. Then I wait to cash out, and I sell them in small amounts for the same reason.
Most of the fear lies in the fact that what you put into the market could be lost, and there is always the possibility of that happening. Since you cannot eliminate that risk, the best thing to do is budget how much you can reasonably afford to lose in the hopes of gaining. In addition to that, do your research and actively learn about the market! There are many informative articles, sites, and videos that detail the ins and outs of the trade, and you can also refine that to learn more about the various charts and techniques that analysts use.
Above all else, just try to enjoy the hands-on learning experience!
PlutoMoo102685100 : How realistic is paper trading?
Richest Man in the world soon?
EternalBlue88 : It missing the FOMO and real Fear of losing money. Its easier to earn on paper trading than real trading due to emotion factor removed.
philosophical finger : Yea
Milk The Cow : I build confidence by playing around with paper trading with quite a profits
gain ![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
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. I think the more real trades u do, the less fear u have, unlike the first time u do ur trade.
= like pressing 1 click is damn difficult, sweating like hell = similar to deactivating a bomb 
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However, I also realised that the market pattern is not as easy as I thought even though I made huge profits there = due to recent Gamestonking market I made huge losses in the paper trading but in the end I still managed to make a come back from all my losses
Overcome trading fear is an experiences thing
I don't know what others reaction is but for me, my 1st trade feel super anxious
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