How Does Paper Trading Work?
Paper trading works by giving you a virtual cash balance and letting you place buy and sell orders using real market prices. The platform simulates order execution, tracks your positions, and calculates profit and loss — exactly like a real brokerage, but with no actual money at risk.
Step by step
You start with a virtual cash balance
Most platforms give you $10,000–$100,000 in simulated funds. SimTrade starts you with $100,000. This is your buying power.
You place orders using real market prices
Search for any stock, crypto, or ETF. The platform shows the current live price. You choose to buy or sell, pick your quantity, and submit the order.
Your order fills at the current price
The platform records the trade in your portfolio. Your virtual cash decreases (for a buy) or increases (for a sell or short). The position shows up in your holdings.
Prices move and your P&L updates in real time
As the market moves, your paper portfolio gains or loses value — exactly as it would with real money. You can see your unrealized gain or loss on every open position.
You close the position and lock in the result
When you sell, the platform calculates your profit or loss and adds it to your performance history. Your win rate, average return, and total P&L are tracked over time.
Does paper trading use real prices?
Yes. Most paper trading platforms pull real-time or slightly delayed data from actual exchanges. When you buy a stock at $152.40, that's the price it's trading at right now in the market. Your simulated results reflect what would have happened with real money.
One important difference from real trading
Real trades can face slippage — the price moves between when you place the order and when it fills. In fast markets, you might buy at $152.60 instead of the $152.40 you saw. Paper trades always fill at the displayed price, which can make performance look slightly better than it would be in live markets.
For beginners learning strategy and mechanics, this difference is negligible. It matters more for high-frequency or scalping strategies that rely on precise execution.
What SimTrade adds on top
- ✓ AI analysis of each trade — grade A through F with specific feedback
- ✓ Backtesting — test how a strategy would have performed historically
- ✓ Trading journal — automatic log of every entry, exit, and outcome
- ✓ Automated bots — run strategies hands-free in the simulator
Frequently asked questions
How does paper trading work?
Paper trading works by giving you a virtual cash balance and letting you place buy and sell orders using real market prices. The platform simulates order execution, tracks your positions, and calculates profit and loss — exactly like a real brokerage, but with no actual money at risk.
Does paper trading use real prices?
Yes. Most paper trading platforms use real-time or slightly delayed market data from actual exchanges. When you buy a stock at $150, that's the price it's actually trading at in the market.
Do paper trades actually execute?
Paper trades simulate execution — they fill at the current market price but no real order is sent to an exchange. In practice, this means paper trades always fill, whereas real trades can face slippage, partial fills, or rejection in fast markets.
See it in action
$100,000 virtual capital. Real market data. Takes 60 seconds to place your first trade.
Try Paper Trading Free