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Paper Trade a Strategy Tutorial

Learn how to deploy a backtested strategy to paper trading, monitor its performance in real-time, and validate results before using real money.

Time required: 15 minutes setup, then monitor over weeks
Prerequisites: A backtested strategy with positive results

Why Paper Trade After Backtesting?

Backtesting shows what WOULD have happened. Paper trading shows what DOES happen in current markets. Critical differences:

Backtesting

  • • Uses historical data
  • • Perfect hindsight (all data available)
  • • Instant results
  • • Tests specific time period

Paper Trading

  • • Uses real-time data
  • • Real-world uncertainty
  • • Takes weeks/months
  • • Tests current market conditions

Key insight: A strategy that backtested well on 2020-2022 might not work in 2024's market conditions. Paper trading validates your strategy works NOW, not just in the past.

Step 1: Select Your Strategy

Choose a strategy with proven backtest results:

  1. Go to Backtesting → Strategies
  2. Find a strategy with good backtest performance:
    • Positive returns on multiple symbols
    • Sharpe ratio above 1.0
    • Max drawdown you can handle
    • Tested on at least 2 years of data
  3. Click "Deploy to Paper Trading" button

Step 2: Create or Select Paper Portfolio

Choose where to deploy your strategy:

Option A: Create New Portfolio

Click "Create New Portfolio" and configure:

  • Name: "Momentum Strategy - Live Test"
  • Starting Capital: $100,000 (match your backtest)
  • Risk Rules: Max 5 positions, 10% per trade

Option B: Use Existing Portfolio

Select an existing paper portfolio from dropdown. Good if testing multiple strategies in one portfolio.

Step 3: Configure Deployment Settings

Configuration Options:

Symbols to Trade

Choose which stocks the strategy will trade:

  • Single symbol: AAPL only
  • Multiple: AAPL, MSFT, GOOGL
  • From watchlist: Import all symbols from "Tech Stocks" watchlist

Position Size

How much to invest per trade:

  • Fixed: $10,000 per trade
  • Percentage: 10% of portfolio equity
  • Risk-based: 1% portfolio risk per trade

Max Positions

Maximum concurrent open positions:

Recommended: 5-10 for diversification without over-trading

Trading Hours

When to place orders:

  • Market open (9:30 AM ET)
  • Market close (3:59 PM ET)
  • Any time during market hours

Step 4: Activate Strategy

  1. Review all settings one final time
  2. Click "Activate Strategy"
  3. Confirmation dialog appears - click "Confirm"
  4. Strategy is now live! You'll see "Active" status with green indicator

What happens now: Stratify continuously monitors your selected symbols during market hours. When entry conditions are met, it automatically places orders in your paper portfolio.

Monitoring Performance

Daily Monitoring Checklist

Weekly Analysis

Performance vs Backtest

Compare paper trading results to backtest predictions. Similar win rate? Similar avg gains? If significantly different, investigate why.

Adjust if Needed

If strategy underperforming, pause and analyze. Market conditions changed? Parameters need adjustment? Don't let it keep losing.

When to Transition to Real Money

Readiness Criteria:

Complete Paper Trading Guide →

Learn all paper trading features and order types

Start Paper Trading →

Deploy your strategy in paper trading now

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