What Is Paper Trading?

Paper trading is simulated trading using real market data but virtual money. Every signal generated by Telos's AI is executed against live prices — the P&L you see is exactly what would have happened with real capital. But no actual funds are at risk.

It's the closest thing to time-traveling into the future to see if a strategy works before you commit real money.

Why Paper Trading Beats Backtesting

Backtesting runs strategies against historical data. Paper trading runs them against live, real-time data. The difference matters because:

  • Slippage and execution delays are real in paper trading, not simulated
  • Market conditions change — a strategy that worked last month may not work today
  • Emotional impact: watching paper trades in real-time prepares you for the psychology of live trading

The ideal approach combines both: backtest first to validate the strategy, then paper trade to see real-time performance before going live.

  1. Week 1: Run the AI with all 6 departments on paper trading. Don't touch any settings. Let the system show you its natural behavior.
  2. Week 2: Review the signals. Note which departments agreed on winning trades. Consider adjusting risk parameters if the system is too conservative or too aggressive for your comfort level.
  3. Week 3 (optional): If you want to experiment with different configurations, create a second paper trading profile with modified settings. Compare the two.
  4. Go live when you've seen enough consistent performance to trust the system.

Paper Trading vs. Live Trading Differences

While Telos's paper trading mode is highly accurate, be aware of a few differences:

  • Fill rates: Paper trading assumes perfect fills. In live trading, some orders may partially fill during high volatility.
  • Latency: Live trading includes actual exchange API latency (typically 50-200ms).
  • Emotional impact: Paper trading doesn't prepare you for the emotional challenge of watching real money fluctuate.

Getting Started

Paper trading is available on every Telos plan, including the free tier. Switch to paper trading mode in your dashboard with one click. No exchange connection required. Create a free account to try it now — or learn more about Telos's AI features before diving in.