Paper trading is simply the act of setting up binary options trades on paper and then watching for the results within the platform to see whether the trade would have been a profit or a loss. This is a completely no-risk way to test our strategies before they are used in actual investment situations. No time or desire to paper trade? The following are several reasons as to why you should reconsider.
Paper Trades Highlight Errors
Paper trades will quickly point out flaws in a binary options strategy and can point out basic flaws in your approach to trading. Who wouldn’t want to know these things in advance? It’s all about avoiding costly mistakes, which no trader wants to make. Mock trading can also help you to rule out terrible strategies (there are plenty of these online) so that you never lose money while trying them out within the Broker Options platform.
Paper Trades Highlight Strong Points
Just as mock trades can help show errors, it can also show strong points. It’s just as important to know what you are doing correctly as it is to know what you are doing wrong. A great strategy should be replicated, but you have to find out that the strategy works well prior to being concerned about using it more than once. When specific actions are providing above average profits, you should want to know exactly what they are. Paper trading can definitely help.
Paper Trades Cost Nothing
Paper trading costs $0, but it is going to take up some of your time. This is why many binary options traders go right into the platform and skip this exercise. If you’re prepared to deal with the consequences, then go right ahead, but do not be surprised if your success rate is not as high as you would like. There is zero risk involved with paper trading, but if you have little time for trading then consider just setting up as many mock trades as you can prior to trying to use a new strategy within the platform.
For those who would prefer to see their trades in action within the platform, but like the idea of risk-free trading, consider a demo account. Binary Brokers offers risk-free demo accounts to all Silver level members. Simply create your account, make a deposit, and then request that your demo account be activated. The only thing better than paper trading is being able to test your strategies within an actual platform in demo format.