Trading on the financial markets is challenging and tricky. It requires mastering different tools and techniques. Inexperienced traders will likely face many complications when entering live trading, including trades execution, risk management, strategy development and emotional control. Coping with these issues under the pressure of the constantly changing market when live trading is nerve-racking and expensive. Seasoned traders are no exception: they also incur significant risks of losses while testing new ideas on a real trading account.
The good news is there is an excellent solution that provides all traders with a risk-free environment to test their strategies and improve trading skills: paper trading.
This article explores the concept of paper trading and its role in the world of finance. Both newbies and professionals should understand what paper trading is and use this unique mechanism on their way to success.