Simulated trading that allows investors to practice buying and selling securities without risking real money.
Paper trading, also known as virtual trading or demo trading, is the practice of simulated buying and selling of securities without using real money. It allows beginner traders to practice trading stocks, options, or futures in real-time, matching live market movements, with zero financial risk.
Paper trading applications use live or slightly delayed feeds from stock exchanges (like the NSE and BSE in India). Users are given virtual capital (e.g., ₹10,00,000 in Arthhwise) which they can use to place buy and sell orders. The application tracks the entry and exit prices, calculates profits and losses, and logs them in a virtual portfolio, mimicking real broker software.
For beginners, paper trading is the ultimate safety net. It allows you to learn how to navigate trading interfaces, use different order types (like limit and market orders), study market dynamics, and test out technical indicators without the fear of losing your hard-earned savings. For experienced traders, it provides a laboratory to backtest and refine new trading systems.
Suppose you want to trade shares of Reliance Industries (RELIANCE) which is currently trading at ₹2,500. You analyze the chart, believe it will go up to ₹2,550, and place a virtual buy order for 100 shares. In your paper trading account, ₹2,50,000 of virtual cash is converted into 100 virtual Reliance shares. If the price rises to ₹2,550 and you sell, you make a ₹5,000 virtual profit. If it drops to ₹2,480 and you exit, you record a ₹2,000 virtual loss.
While paper trading perfectly replicates market pricing and chart dynamics, it cannot replicate the emotional psychology (fear and greed) of risking real money. Additionally, virtual orders execute instantly, whereas real trades depend on market liquidity.
Arthhwise is one of the leading paper trading applications in India, offering real-time NSE data, virtual capital, structured courses, and a trading game community to compete with others.
Practice trading stocks with live NSE/BSE market prices and ₹10,00,000 in virtual capital on Arthhwise.
Download Free Android AppA style of trading where securities are bought and sold within the same trading day to capture short-term price movements.
An investing style where bought stocks are held for more than a day, transferred into a demat account for long-term hold.
The projected price level of a stock as stated by an analyst or trader, representing the exit point of a profitable trade.