Bitcoin paper trading is a useful tool for beginners and experienced crypto traders to practice their trading strategies and techniques without actually using real money.
It might seem redundant, but the idea of having a free tool to explore your investing strategies and style without risk should be taken advantage of.
In this post, we’ll share exactly what is Bitcoin paper trading and highlight some of the best websites and apps to use.
We’ll go over the interface of a popular app and give you a step-by-step guide showing just how to get started.
We’ll also review the benefits of practicing before using real money and compare the psychological aspects of trading.
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Bitcoin Paper Trading at a Glance
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What is Paper Trading with Bitcoin?
The easiest way to explain what paper trading is is to describe it as a test run for real investment trading.
You use virtual money or cryptocurrencies, such as Bitcoin, to make trades.
It’s a type of investment simulation that mimics the real market, allowing you to test your crypto investing strategies without the risk of losing any real crypto or money.
This is a very useful tool for new crypto traders who want to learn the ropes of trading without the fear of making a grave mistake. Seasoned traders can also take advantage of these tools to experiment with new tactics without the risk.
For beginners, Material Bitcoin crypto cold wallet is the easiest option for directly buying and storing BTC.
There are many platforms and apps to pick from, all of which offer different features. We will review a few of them, such as ProRealTime and Trading View.
They mimic real market conditions and help you get a feel of what it is like to be a real Bitcoin trader.
A study done by the University of California, Berkeley found that traders who first practiced paper trading before doing so with real money were significantly more successful at managing their portfolios and making better and informed choices.
Therefore, paper trading can be an invaluable tool for anyone who wants to start investing for the first time but is too scared of the risks.
Best Bitcoin Paper Trading Apps
Several apps and platforms stand out when it comes to paper trading Bitcoin. Our favorites of 2024 are:
ProRealTime
This is a powerful and user-friendly trading platform. ProRealTime offers many paper trading features, like real-time market data and detailed charting tools. You have plenty of opportunities to practice your skills and play around with different trading strategies in a realistic marketplace without risking a cent. Choose from a wide variety of crypto pairs and securities.
👍What we like about ProRealTime: Real-time data and information, providing extensive trading tools and charting.
👎What don’t like so much: You need to understand how to read graphs and charts to fully take advantage of this tool.
TradingView
This is another popular platform for paper trading, also known as simulated trading. Once you log into your TradingView account, you are given a default amount of $100,000, which you can convert to BTC and immediately start to buy/sell on the platform. You can even reset your balance at any time and start from scratch if you need to. TradingView offers charting tools and also a community to connect with other traders.
👍What we like about TradingView: Large community to share ideas with, and a user-friendly interface.
👎What don’t like so much: If you want to utilize some advanced features, you need to sign up for a subscription.
Crypto Exchanges
Several popular crypto exchanges like Binance, Kraken, and ByBit also offer paper trading. They provide paper trading features through demo accounts. These platforms have the advantage of practicing in a real exchange platform but with virtual funds. Once you feel confident within the paper trading platform, you can make a smoother transition to using the real crypto exchange as the interface looks identical.
👍What we like about these exchanges: You have access to various cryptocurrencies in the real exchange interface.
👎What we don’t like so much: You don’t have access to features outside of the specific exchange tools.
Choosing the right platform for Bitcoin paper trading can help your learning experience immensely.
Complete tools like ProRealTime provide features and data to help you every step of the way, while a more community-driven app like TradingView might be better for traders who want feedback from other investors.
Using the paper trading features of crypto exchanges will help you transition to their real exchange without a learning curve.
What they all have in common is how they can help and aid you in building confidence in your trading strategies.
How to Do Bitcoin Paper Trading: Step-by-Step
Here’s a step-by-step guide on how to start Bitcoin paper trading using one of our favorite platforms, ProRealTime:
1️⃣Sign Up for a ProRealTime Account: Go to the ProRealTime website and create a free account. It’s easy and quick to do.
2️⃣Click on Launch Your Platform: This will grant you access to the trading interface.
3️⃣Search for Your Crypto Pair: Use the search function to find the BTC/USD trading pair or other crypto.
4️⃣Explore the Virtual Account: Get familiar with the chart view, adjust the timeframes to minutes, or days, and also change the parameters of the indicators.
You can find a more in-depth video tutorial here.
5️⃣Execute Your First Paper Trade: Use the virtual funds in your account to make your first BTC trade. On the top bar, you will find the buy/sell and other trading option tools. Click on the feature that you want to use and place your trade.
In this example, we bought BTC. Our purchase now appears on the graph.
6️⃣Utilize Available Trading Tools: Take advantage of the tools available on ProRealTime to practice your techniques and strategies. Adjust graphs, create portfolios, and review top trades from the day. You have nothing to lose!
Paper Trading Crypto: Don’t Get Used to It
While paper trading is a great way to learn about trading, how to read graphs and charts, and familiarize yourself with the crypto market, it’s important to not become reliant on it.
Especially if you want to actually invest in crypto.
The main reason is the psychological impact of real trading that is missing from paper trading.
Real trading has many emotional factors that impact your decisions, like fear and greed.
If you know that you are in a simulated trade, it’s easier for you to make bold moves and take risks that you would never do otherwise.
In real trades, the stakes are much higher, so you feel the stress, happiness, or fear from buying/selling.
It’s highly recommended that traders transition from paper trading to real trading as soon as possible.
Bitcoin Trading or Bitcoin Hodling
When you’re first getting into the world of crypto investing, it can be challenging to decide whether or not you want to trade crypto or simply hold it (HODL).
Trading BTC means that you need to actively buy and sell in order to capitalize on the market’s changes. This requires constant monitoring and adjusting.
On the other hand, using the holding strategy (which is highly recommended by many professional investors), is to purchase BTC and store it in a crypto wallet for long-term hold.
The HODL strategy implies that over time your investment will increase.
Material Bitcoin stands out as one of the best options for beginners wanting to invest in Bitcoin. Here’s why:
- User-friendly set-up and interface.
- Secure cold storage offline.
- Easily transfer crypto from an exchange to your wallet.
- Buy BTC directly from your Material Wallet.
- Support and online resources to keep you up-to-date.
FAQ
Is there paper trading for crypto?
- Yes, many platforms offer paper trading for cryptocurrencies.
Does Coinbase have paper trading?
- As of now, Coinbase does not offer a paper trading feature, but other exchanges like Binance, KuCoin, and Kraken have paper trading options.
Is paper trading worth it?
- It’s a good tool to use to practice your trading strategies.
Can you make money with paper trading?
- No, since paper trading uses virtual money, there are no real profits that you gain.
