Using Paper Trading to Evaluate Automated Trading Strategies
Summary
The document introduces paper trading as a way to run strategies in live market conditions with a virtual portfolio before committing real funds. It describes using a cloud trading service to select strategies, choose a simulated portfolio, and monitor the resulting bot. Because the account uses virtual funds, the described setup does not require exchange credentials.
The suggested workflow is to explore strategies in simulation, decide whether to deploy one with real capital, and continue experimenting with other strategies in a separate paper trading setup. This outlines a practical evaluation process, but the document gives no details about how simulated orders are filled, whether fees or slippage are modeled, or how results should be assessed. Paper trading can reveal operational behavior in current market conditions, but simulated performance alone does not establish that a strategy will perform similarly with real orders or capital.
Key ideas
- Paper trading runs a strategy with virtual funds in live market conditions.
- A simulated portfolio can be used to explore strategies before risking real capital.
- The described cloud setup does not require exchange credentials for paper trading.
- The document does not explain fill assumptions, fee modeling, or how to evaluate simulated results.
Tags
Full text
# Paper trading with OctoBot
---
title: "Paper trading with OctoBot"
slug: "paper-trading-with-octobot"
date: "2023-11-17"
authors: ["guillaume"]
tags: ["Trading", "Strategy", "OctoBot cloud"]
image: "/images/blog/paper-trading-with-octobot/cover.jpg"
---
# Paper trading with OctoBot
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## Introducing paper trading
Paper trading is service allowing to test trading strategies in live conditions using a virtual portfolio.
By using paper trading, you can easily:
- **Test** the trading strategies you are interested in before using your real funds
- **Experiment** all the trading strategies you are curious to know more about
## OctoBot's stance on paper trading
At OctoBot, transparency is one of our core values. It is the reason why OctoBot is [open source](/guides/octobot) and why each strategy comes with its historical results.
In order to bring this one step further, we decided to make [paper trading](/investing/paper-trading-a-strategy) of trading strategies **free and unlimited**.
While most trading robot services choose to charge for paper trading or limit its duration, we decided to stay true to our ethos and include paper trading in our free services for all users.
This means that when using OctoBot cloud, you can:
1. **Explore**: Test the trading strategy (or strategies !) you are interested in using paper trading
2. **Invest**: Once you find a trading strategy you like, start an OctoBot with your real funds
3. **Optimize**: Keep experimenting other trading strategies risk free with your paper trading OctoBot
## How to start a paper trading OctoBot ?
As paper trading is using virtual funds, OctoBot cloud doesn't need your exchange credentials to run a paper trading OctoBot.
This means that you can very quickly experiment with any strategy on OctoBot cloud in just 3 steps:
1. Create your [OctoBot](https://www.octobot.cloud) account
2. Select the strategies your want to use
3. Choose paper trading and the simulated portfolio you want to trade with
4. Follow your new OctoBot either from <a href="https://www.octobot.cloud/bots" rel="nofollow">OctoBot cloud</a> or the <a href="https://play.google.com/store/apps/details?id=com.drakkarsoftware.octobotapp&utm_source=www.octobot.cloud&utm_media=blog&utm_content=paper-trading" rel="nofollow">OctoBot app</a>Shown in full with attribution under the source's licence. Licence: GPL-3.0
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.