Originaly posted by Bogdan G. For the whole article click here
What’s Paper Trading all about and how to use it?
Paper trading is just that…paper trading. Yea, old school, I know but incredibly helpful. Get your sheet of paper, your favorite pen and sit in front of your computer, watching the market. When your strategy of choice tells you it’s time to place a trade, do not place it on the binary platform. Instead, write all the details of that potential trade on your piece of paper, including underlying asset, account balance, opening price and time, expiry time, amount risked and of course, if it’s a Call or a Put. Then keep watching the market or do everything just like you would do if you had a real trade. At expiry time, write the details again, including the new account balance which will be higher if you were right about your prediction and lower if you were wrong.
In my honest opinion, Paper Trading is the best way of testing trading strategies, improving your discipline and making you a better trader overall, but only if you use it wisely. You should always use a paper trading account with an investment amount similar to the one that you will use for your real account. If you want to invest $500 in a real Binary Options account, don’t paper trade with $10K because that will just give you a false sense of what to expect in terms of profits. Overall it’s the best way of gaining confidence in your strategy and your decision making skills, but be careful, it’s not the real thing… it takes out the emotions involved when trading real money. You will never bite your nails or have sweaty palms while paper trading. These are things that you have to deal with once real money is involved.