# Paper Trading

*Trading & Technical Analysis — Finicade finance glossary*

Paper trading tests a strategy with simulated money in live markets. It's genuinely useful for learning platform mechanics and for validating that a system's signals occur as expected. It cannot test the part that actually breaks people: simulated fills ignore slippage, and no simulator reproduces what a real 15% drawdown does to your decision-making.

**Also known as:** demo trading, simulated trading, backtest live

**Related terms:** [Backtesting](https://finicade.com/glossary/backtesting), [Trading Journal](https://finicade.com/glossary/trading-journal), [Slippage](https://finicade.com/glossary/slippage), [Day Trading](https://finicade.com/glossary/day-trading), [Behavioral Biases](https://finicade.com/glossary/behavioral-biases)

Source: https://finicade.com/glossary/paper-trading