Paper trading for new stratergy

Whey thinking about any new stratergy
paper trading on how many days old data should be done to make sure that it works

until u see something that u did not anticipate, but still was able to get out at the right time, and u can start trading real when real trading feels like paper means thts how u should feel when u put on a trade that its what u been doing from weeks,even if the whole trade goes bust u can still think about the trade but not about the money lost.

If you are trading stocks and not the index, Instead of paper trading you can take very small positions in the cash market, say for example 10 to 20 shares depending on the price of the stock. This will give you a real feel of the strategy you will be using without the risk of huge loss.



i also agree with @kishy on the merits of actual trading as compared with paper trading for below reasons:

  1. demo trading aka paper trading doesnot gives the real feel for how to handle the fear and greed that grips the investor.
  2. paper trading lacks some aspects of real trading such as merger, stock split and other aspects.
  3. paper trading may not work other situations of real market scenario like price arbitrage and other aspects.
  4. paper trading will be quite waste of time as your entry into the market will be a little late for that matter of real learning.

and now the precautions to take while doing realtime trading:

  1. start with small amount or you can even start with purchasing only one share in terms of quantity and then practise on it the various aspects of the market such as shorting one share and see what happens with your strategy.
  2. trade for small amount of share and then can try the price arbitrage and other things and slowly work your things up the ladder.
    good luck with your trading.

Agree with @kishy