This is something that is nearly impossible to factor into your paper trading, but should be considered regardless. When dealing with real money, your attitude may change, and it may generally be to your detriment. For example, greed, fear, impatience and panic suddenly become a lot more significant when you are trading real money. These detrimental virtues can cause you to depart from your trading strategy, and make irrational decisions. Discount market action.
Real trading is more of an ongoing process than paper trading.
If the market does well the next few weeks, that investor may think they have a winning paper trading strategy. However, the good performance may have more to do with lucky market timing than actual success. Your Paper Trading Strategy A paper trading program can be set up any way an investor wants. Paper trading can be a valuable tool for investors. However, in many cases it is done so ineffectively that it actually creates a false understanding of the market, because the methodologies fall apart when applied to real time trading.