How to Paper Trade on TradingView (2024)

TradingView is one of the most popular trading and charting platforms for day traders. It offers a wide range of features including advanced charting, screening, and analysis tools. One of the best things about TradingView is that it allows traders to practice trading stocks, futures, forex etc without risking real money. This is known as paper trading or simulated trading.

In this comprehensive guide, we will cover everything you need to know about paper trading on TradingView.

What is Paper Trading?

Paper trading, also called virtual trading or simulated trading, allows you to practice trading by placing imaginary trades instead of real trades. It is an essential tool for novice traders to gain experience and test out strategies in a risk-free environment before putting real capital on the line.

With paper trading you can execute trades using virtual money so you don't have to worry about losing any actual funds. It provides a safe space to learn how to analyze charts, identify trading opportunities, execute buy and sell orders, use stop losses, track P&L etc. Without paper trading, beginner traders would have to learn everything through trial and error using real money which can be quite expensive.

Benefits of Paper Trading on TradingView

Here are some of the key benefits of using TradingView for paper trading:

• Completely risk free practice - you are trading with virtual money so there is no fear of losing funds.
• Test strategies and ideas before committing real capital.
• Gain experience in executing trades, managing positions, tracking P&L etc.
• Build confidence in your skills before going live.
• Get familiar with TradingView as a platform.
• Try different order types like market, limit, stop loss etc.
• Practice trading across stocks, futures, forex, crypto etc.
• Ideal for beginners to learn the ropes of trading.
• Available on both desktop and mobile apps.
• Completely free to use (no balance or commission fees).

How to Enable Paper Trading on TradingView

Enabling paper trading on TradingView is quick and easy:

1. Login to your TradingView account and open a chart for the instrument you want to paper trade e.g. AAPL stock.
2. In the bottom pane, click on the account selector dropdown next to the broker logo.
3. Select the “Paper Trading” option.
4. A popup will appear, click on the “Enable” button.
5. Your paper trading account will now be activated with a starting virtual balance of $100,000.

And you're all set! Now any orders you execute from this chart will be paper trades, not real trades.

How to Place Paper Trades

Once your paper trading account is enabled, you can start executing practice trades:

1. Analyze the chart of the instrument and identify a potential trading opportunity.
2. Select an order type - Market, Limit, Stop Limit etc.
3. Enter trade size e.g. number of shares or contracts.
4. Set the entry price and stop loss if required.
5. Click on Buy or Sell to submit the order.
6. The order will be executed based on price action and you will see your position open in the Positions pane.

Monitor the profit/loss on open positions as price fluctuates. You can close positions at any time by clicking the exit button.

Over time, practice executing different order types like OCO brackets, scaling in, scaling out etc. This will help build muscle memory.

Tips for Effective Paper Trading

Here are some tips to ensure your paper trading is as close to real trading as possible:

• Use realistic position sizing - Don't take exceedingly large positions that you cannot in live trading.
• Use actual prices - If possible, paper trade using live market data not historical backtesting.
• Follow sound risk management - Use stop losses and limit total risk per trade to 1-2% of capital.
• Track detailed performance stats - Analyze your win rate, reward/risk ratio, profit factor etc.
• Use it diligently - Aim for regular practice e.g. 100+ trades before going live. Quality over quantity.
• Have a trading journal - Log every trade with entries, exits and performance review.

How is it Different from Backtesting?

On TradingView, you also have the option to backtest trading strategies using historical data. So how is paper trading different from backtesting?

The key differences are:

• Paper trading uses live market prices and order execution. Backtesting uses past historical data.
• You manually execute paper trades in real-time. Backtesting is automated.
• Paper trading can simulate real market impacts like slippage and liquidity.
• Paper trading records your actual trading skills and psychology.
• Paper trading uses virtual money. Backtesting doesn't require any account balance.
• Paper trading is forward testing a strategy. Backtesting is based on past performance.

In summary, paper trading evaluates your skills while backtesting evaluates just the strategy logic. Use both for overall practice before live trading.

Paper Trading on Mobile App

The TradingView app also includes paper trading capabilities so you can practice on the go. To enable it on mobile:

1. Tap on your profile picture in the bottom toolbar.
2. Select Paper Trading.
3. Turn on the Paper Trading switch.
4. Return back to the charts page.

Now you can execute practice trades on mobile just as you would on desktop.

Can You Paper Trade Cryptocurrencies?

The paper trading feature on TradingView currently supports stocks, forex and futures markets. At the time of writing, paper trading crypto coins like Bitcoin is not possible.

This is because there is no unified order book between exchanges for cryptos. However, many cryptocurrency exchanges like Coinbase, Binance etc. offer paper/demo trading directly on their platforms. So you can use those to practice crypto trading.

Can You Short Sell and Use Leverage?

Yes, paper trading accounts on TradingView allow you to simulate short selling by executing sell orders without owning the instrument. You can also trade with leverage (margin) up to 5x by enabling it from the Account Settings.

This allows you to practice advanced strategies like shorting stocks, trading futures etc. in a risk-free manner.

Can You Trade 24/7?

The underlying instruments will only be tradeable during their actual market hours. However, you can execute paper trades 24/7 based on the last traded price and backtest historical data any time.

This allows flexibility to practice trading strategies after market hours based on daily price charts. Only the live tick-by-tick order flow will not be simulated outside regular hours.

Is There Any Time Limit?

There are no time restrictions on practice accounts. The paper money balance and trading activity will persist permanently on your TradingView profile.

You can trade as long as you want to gain experience before using real money. It's recommended you execute at least 100+ trades over several weeks before moving to live markets.

Can You Reset the Balance?

If you lose the virtual $100,000 balance, no need to worry. You can easily reset the paper money balance back to $100,000 anytime without losing your trading history.

Click on your profile picture > Paper Trading Settings > Reset Balance > Confirm.

Resetting the balance allows you to start fresh and continue practicing without limits.

Can You Use it on a Free Account?

Paper trading is available even on TradingView's free plan. You do not need to upgrade to a paid subscription to access paper trading capabilities.

However, free accounts are limited to 3 indicators per chart. So you may want to upgrade to Plus or Pro for more advanced features. But practice trading itself is unrestricted in free accounts.

Are There Any Limitations?

The main limitations of paper trading on TradingView are:

• No support for cryptocurrencies. Practice crypto trading on actual exchange demo accounts.
• Maximum 5x leverage available. No higher margins.
• Only closing orders allowed for options. Cannot write options contracts.
• No support for mutual funds, bonds etc. Only instruments with live prices.
• Limited to 3 indicators on free plans.

Other than the above, all core trading functionalities are simulated accurately for practice.

Can it Completely Replace Real Trading?

While paper trading provides an excellent space for gaining experience, it cannot fully replicate the pressures and emotions of actual trading. Parameters like order fills, impact on price etc. will only be accurately reflected in live markets.

It is recommended to start small with real money after paper trading, rather than moving completely to sizable positions right away. The transition should be gradual as you continue learning.

Use paper trading and micro-lots to minimize risks when starting out with real capital. Don't rely entirely on virtual trading for extended periods. Slowly shift to live markets while managing risk.

Paper Trading platforms vs Live Trading platforms

Some key differences between dedicated paper trading platforms vs actual brokerage platforms:

• Paper trading platforms allow you to reset virtual balances, while live platforms involve real money risk.
• Paper trading platforms have no impact on real market prices and liquidity, while actual trading does.
• Trades executed on paper trading platforms have no commission fees, while live trades have commissions and other costs.
• Profits/losses on paper trading platforms have no tax implications, but real trading profits/losses need to be reported.
• Paper trading platforms provide trading experience, but cannot replicate the psychology involved in actual trading fully.
• Live trading platforms involve technical risks like system outages which are absent on practice platforms.
• Paper trading platforms often have limited product offerings compared to full featured live brokerages.
• Practice trading platforms are ideal for beginners, while live platforms are suitable once traders are seasoned.
• Support and security aspects differ between paper trading and actual brokerage platforms.

In summary, paper trading helps you learn the mechanics of trading risk-free. But successful live trading requires experience, discipline, risk management and mental skills. Use paper trading as a starter before funding a real brokerage account.