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Beginner's Guide to Bitcoin Paper Trading: Hone Trading Skills Risk-Free
Author: Catherine
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Starting a trading journey can seem intimidating, especially if you dip your toes into crypto. To make it a bit easier, traders have devised a method to practice without money at stake. And so long ago, that this method is called paper trading. Learn more about how paper trading applies to Bitcoin and cryptocurrencies in our new guide!

Key Takeaways

What is Paper Trading?

pencil, notebook, crumpled

Paper trading is also referred to as simulated trading, and it is a mode of trading that allows users to try their trading techniques without any real money. Thanks to it, traders can estimate the usefulness of their methods without putting any real money at risk.

Why paper? The term predates computing and digital technology but the meaning is still the same. To practice, traders would write down calculations and draft techniques to check the expected results.

The alternative language that describes it is “simulated environment” or “Demo Mode”. Regardless, it lets you try stock and crypto trading with simulated funds.

Is crypto paper trading a thing?

Similarly, crypto paper trading makes use of simulated cryptocurrency markets to enable the practice of trading strategies without real financial commitment. This practice is the same as the one in traditional markets which takes its name after traders drafting hypothetical moves on paper.

Crypto paper trading can provide a realistic simulation of real markets to let the users get a feel for the market dynamics and test trading strategies without tangible monetary risk. The majority of online crypto trading platforms offer such features. The best paper trading experiences can come with supplementary material like educational resources, tutorials, and videos.

How does Crypto Paper Trading Work?

Cryptocurrency Simulator: Invest fake money and play your strategies  without risking real money
Source: CryptoSpaniards Simulator

Even when it comes to paper trading virtual currencies, it is still a simulation of actual trading with virtual money. To avoid any confusion: virtual currencies are a kind of digital currency, and although they may or may not be attached to a fiat currency, it is accepted as a means of payment. Paper trading has to do with simulated funds that cannot be converted to any other kind of money or value.

To test different financial instruments and strategies without risking your capital, you should start with a paper trading account. Alternatively, if you are eyeing a real trading platform but would like a bit of practice beforehand, check if you can make an account and have at it in demo mode first.

Depending on the service, a paper trading program might resemble a full-fledged version of the regular interface or a simple demo account with just a few buttons. The paper trading service will credit you with a set amount of virtual money on balance. Then you can start practicing ways to invest. Your actions will be denominated in simulated forms of cryptocurrencies. Some services just focus on buying and selling crypto, while others allow you to also experiment with options such as futures trading.

Some crypto paper trading apps limit the demo account balance but the funds in a demo account cannot be withdrawn either way. Track your performance and use the reports to work on your trading strategies. Improve trading skills at your own pace and when you are ready, switch to live trading.

Advantages of Crypto Paper Trading

The virtual trading experience where you can practice without fear of loss of real funds is perfect for beginners. With virtual coins to practice trading, introduction to crypto trading becomes a stress-free learning experience.

But the uses of practice trading mode go even beyond learning the ropes. Even after you get a grip on the basics, using paper trading apps to test strategies and evaluate their effectiveness will help you choose the best approach. You can try both new techniques and the ones you are already using to see how it performs over time.

You can start with Bitcoin paper trading and move on to other pairs. Depending on your confidence, this transition, too, can be done through the paper trading feature.

A risk-free environment with no real funds at stake is the perfect ground to deepen the knowledge of the market trends, charts, indicators, etc. Finding and correcting any flaws in strategies? Checking if it can meet your objectives? The simulated trading environment is your oyster.

Paper Trading for Advanced Traders

statistics, diagram, graphic

Even experienced traders should not dismiss using a simulated trading environment that does not involve real money. Why miss an opportunity to experiment with different instruments and advanced trading tools in a risk-free sandbox?

Likewise, practice accounts can be useful to an experienced paper trader for testing new strategies before committing real money or refining their existing strategies. As the strategies and instruments you are willing to handle get more advanced, instead of risking real money, try to see the results in a simulation first.

For example, scalping is a potentially profitable trading strategy but only under certain circumstances and ideally, with a trading bot. Crypto paper trading here will get two birds with one stone: see if this strategy can be profitable at the moment and test the bot. Bot providers often offer a free demo period to test their products.

Drawbacks of Paper Trading

Crypto paper trading is a perfect way to practice but still with its caveats. Before diving in even into this riskless affair, make sure to pay attention to a few crucial facts.

While dealing with virtual funds, the picture of how trading impacts your balance and assets might not be complete. Some paper trading platforms are known to hide or miscalculate details such as commissions and other fees. While negligible on a smaller scale, the costs can add up long-term, with high-frequency trades or large positions. You can avoid it by opening a paper trading account with a site that displays potential trading costs and fees accurately.

There can also be other ways in which a paper trading app would not work the same way as a real money app. This is rare, so it should not be the major reason for concern. However, the no-risk environment can noticeably affect the trader’s behavior. Being conscious of real trading and simulated trading differences can change one’s attitude toward risk or confidence.

And speaking of attitude, it might sting but let’s spell it out: none of the funds in simulated trading are real, meaning losses and profits alike. You might gain a decent score but these fake balances are not convertible to actual crypto. To make things worse, if the platform does not provide a realistic simulation, you might fail to recreate the success in the real market!

It makes sense that a demo account or a free paper trading account generally does not have a cost attached. More advanced paper trading apps or platforms can paywall some features. Some you can do without but some make the simulated environment more realistic, like market slippage and order fill delays.

Last but not least, a common nitpick with some paper trading platforms and apps is the inadequacy or the lack of customer support. Frustrating as it is, when there is no investing real money, the priority of your requests may be deemed low depending on the business.

Paper Trading Crypto Apps and Platforms to Try

The right choice of the crypto paper trading app to improve your skills and knowledge will save you a lot of trouble. If you can, try using these apps as your stepping stones to becoming an adept trader.

We have mentioned that plenty of crypto trading platforms also offer a trial version with a simulated environment. What are the best paper trading platforms to choose from? Here are a few options with a demo account or virtual account for cryptocurrency that you can consider.


I want to practice trading without risking real money. How can I do it?
Source: TradingView

TradingView is a popular analytics platform for financial markets, including cryptocurrencies. It is chock full of handy features and offers a simulator to refine your skills before using real money. TradingView is not a trading platform but has a fully functional demo account that utilizes its industry-standard charting framework. Create a sample account, practice trading, backtest strategies, and browse ideas from the TradingView community. This platform also works well for people who want to assess multiple trading strategies simultaneously.

Despite not being an exchange, this site is not that different from other crypto paper trading platforms. Start by making a paper trading account, receive virtual money, and start investing. A highlight feature of TradingView’s paper trading platform is snapshots of trade setups with virtual purchases and account balances.

Most popular centralized crypto exchanges offer the paper trading feature and trial versions. After all, you can’t get big without knowing how to build a user base, and isn’t risk-free trading the best way to welcome newcomers?

Crypto paper trading: The ultimate guide to practice crypto trading
Source: OKX

The OKX Demo trading platform is one of these options for users to hone their strategies without risking real money. It promises a robust trading experience that mirrors real market conditions. OKX provides demo trading with USDT, BTC, OKB, and other cryptocurrencies for simulated trading.

Get to know crypto trading without monetary risk with a Binance Mock Account. It is another stepping stone to developing trading skills before venturing into real-time trading with the benefit of being offered by one of the largest CEXs. Its testnet lets you trade with a virtual account on its spot and futures markets in your simulation trading account without the risk of losing money.

Last but not least, KuCoin Sandbox is designed for users searching for opportunities to test trading strategies in a controlled environment.

BitMEX & Bybit

BitMEX is a reputable cryptocurrency exchange focused on derivatives, and it offers a Testnet feature for paper trading. Here, you can practice trading futures and perpetual contracts with simulated funds. The Testnet requires a separate account to start paper trading. When you make one, you get 100,000 Testnet USDT to work with.

BitMEX comes with a footnote of not giving a realistic experience. The Testnet prices reportedly differ from BitMEX prices, especially when liquidation is low.

How to Use Bybit Demo Trading (Step-By-Step)
Source: Bybit Learn

Alternatively, Bybit’s paper trading platform has a user-friendly interface with access to crypto prices and other essential metrics. On top of a risk-free environment for adjusting to crypto trading, Bybit’s Testnet also provides a ton of helpful resources.


Some parting words of advice: before you make a choice, research and compare different platforms and apps to find the best crypto paper trading for your needs and trading style. Educational resources and participating in online trading communities with guidance from experienced traders will enhance your trading skills and knowledge further.

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Frequently Asked Questions

Can you paper trade Bitcoin?

Yes, many cryptocurrency exchanges offer simulated trading or demo accounts. In addition to virtual trading on the BTC markets, they can also offer other cryptocurrencies or derivative assets.

Does Coinbase have paper trading?

No, Coinbase does not have a free version or a paper trading feature as of the time of writing.

Does paper trading give you money?

No, all gains and losses alike are in virtual funds in paper trading. Even if you end up with some profits, you would not be able to convert them to real funds.

How to trade Bitcoin for beginners?

Beginners can try trading Bitcoin even without owning it with a crypto paper trading account on popular platforms and apps. It provides an experience emulating the hands-on Bitcoin market trading to test different trading strategies without any financial risk.