Paper vs live trading
Test strategies with paper trading (no real capital) before going live.
Paper trading support is being finalized. The behavior described below reflects the planned product surface — exact UI labels and the toggle location may change before launch.
Find it at: /agentic-trading → strategy creation → Paper mode toggle
1. Paper trading mode
Paper mode runs a strategy end-to-end against live market data, but no real orders reach the broker or DEX. It's the safest way to validate a strategy before risking capital.
| Aspect | Paper mode | Live mode |
|---|---|---|
| Capital | Simulated balance you set at strategy creation | Real funds in your connected broker / wallet |
| Market data | Same live feeds (real-time prices, indicators, events) | Same live feeds |
| Order routing | Orders logged in the execution log only — never sent to the venue | Orders submitted to broker (SnapTrade) or DEX (Hyperliquid) |
| Fees | Estimated, not actually paid | Real, deducted from your account |
| Notifications | Same AI_TRADE notifications fire | Same AI_TRADE notifications fire |
Strategies in paper mode appear in the Active Strategies panel with a PAPER badge so you don't confuse them with live runs.
2. What it tells you
Paper trading gives you four useful reads on a strategy before you commit real capital:
- Strategy P&L under current market — does the strategy actually make money given today's regime, or is it relying on historical conditions that no longer hold?
- Signal generation quality — how often does it find setups? Too few signals means dead capital; too many means rule is too loose.
- Slippage estimates — the gap between the signal price and the simulated fill price gives a rough read on what real slippage might look like.
- Behavior in stress — when the market gaps or moves fast, does the strategy panic-close or stay calm? Paper mode shows the reaction without the cost.
Run paper mode for at least one full week (covering different market sessions) before drawing conclusions.
3. Limitations
Paper trading is not a perfect rehearsal. Treat its results as directional, not definitive.
- No real fills — your simulated order doesn't actually compete for liquidity, so it always "fills" at the mid or quoted price. Real fills are noisier, especially on small-cap stocks and thin crypto pairs.
- No real liquidity impact — large simulated orders never move the market; large real orders do.
- No real fee / funding impact — paper estimates are approximate. Perpetuals funding rates, taker fees, and broker commissions compound over time in ways simulations under-estimate.
- Psychological gap vs real trading — watching a paper account drawdown 5% is not the same emotional event as watching real capital drawdown 5%. Your discipline in live mode is the variable paper mode cannot test.
Treat a profitable paper run as necessary but not sufficient — promotion to live still requires you to size down on the first real deployments.
4. Promoting paper to live
Before flipping a strategy from paper to live, run through this checklist:
- At least 20 closed trades in paper mode — single-digit trade counts are noise, not evidence
- Positive paper P&L over a horizon that includes at least one drawdown event
- Win rate and average win/loss size match expectations — a 60% win rate with average loss 3x average win is a losing strategy
- Execution log reviewed — no surprise trades, no rule misfires, every entry has a rationale you understand
- Live size starts small — re-deploy at 10–25% of the paper allocation. Scale up only after live behaviour matches paper.
- Notifications and kill switches verified — AI_TRADE alerts arrive on your phone, max-daily-drawdown trigger has been tested
5. Reset paper account
You can reset the paper account at any time to start a fresh test:
- Open the strategy in paper mode
- Click Reset paper account
- Confirm — all simulated positions and history are wiped
- Strategy resumes with the original simulated capital
Reset before re-testing the same strategy after a parameter change. Don't reset mid-run — you'll lose the data you're trying to evaluate.
Resetting a paper account is irreversible. Export the execution log first if you want to keep the history for comparison.
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