How to Build a Stock Trading Strategy Without Risking Real Money

Why Paper Trading Matters

Most new traders lose money in their first year because they skip the practice stage. Paper trading removes the financial pressure so you can focus on learning order types, reading price action, and building a repeatable routine.

Getting Started

1. Pick a realistic starting balance that matches what you would actually invest.
2. Choose one simple strategy and commit to it for at least two weeks.
3. Place your first trade and pay attention to how the fill price compares to your expectation.
4. Review every trade — winners and losers — and note one improvement each session.
5. Track whether you followed your rules, not just your P&L.

Common Mistakes to Avoid

• Using an unrealistic balance that teaches you nothing about position sizing.
• Switching strategies after every losing trade instead of giving your approach time.
• Skipping trade reviews — the simulation only helps if you study what happened.