Paper Trading
Paper trading is of utmost importance while someone is learning how to day trade. Paper trading is the placing of make-believe trades over a period of time before actual money is used.
Paper trading should give a potential day trader an idea of his ability to day trade correctly. While paper trading, a trader should first try to become very familiar with the trading software he is using rather than with making or losing money. After he knows the software system well, a day trader should continue his trading simulation in an attempt to improve his trading skills.
The way to make paper trading the most rewarding is by using a day trading simulator that imitates real market conditions as much as possible with real live market prices. Even though, paper trading has usually been done with stocks or futures, in the last few years various realistic and high quality currency trading demo systems have hit the market.
The day trader should approach paper trading as if the money in the account is real and, for that reason, should not trade taking more risk than he normally would in real life.
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