I've reviewed 1,000+ paper trading accounts. The same 5 mistakes appear again and again.
The scary part? These mistakes seem harmless in paper trading. But when you switch to real money, they become account killers.
Here's what typically happens:
- Paper trade for 1-2 months (develop bad habits)
- See virtual profits (feel confident)
- Switch to real trading (bad habits still there)
- Lose real money (bad habits now expensive)
- Blame the market (when it's actually the habits)
Don't be that trader. Fix these mistakes NOW while they're free to fix.
Mistake #1: Not Treating It Seriously
"It's just virtual money anyway..."
Why It Happens:
Virtual losses don't hurt. So you overtrade, ignore stop-losses, revenge trade, average down on losers—all the things that destroy real accounts.
The Real Cost:
Meet Amit (28, IT professional):
📊 Paper Trading: Made ₹1.2 lakhs in 2 months
→ Took 120 trades (6 per day average)
→ No stop-loss discipline
→ Averaged down on losers
💸 Real Trading: Lost ₹80,000 in 3 weeks
→ Same bad habits, but now they cost real money
✅ How to Fix:
- Set Virtual Capital Limit: Act like you only have ₹1 lakh
- Track Every Trade: Write entry reason, exit reason, emotions
- Follow STRICT Rules: Stop-loss mandatory, max 2 trades per day
- Imagine Real Money: Before every trade ask "Would I do this with real ₹50,000?"
Mistake #2: Overtrading
"More trades = more practice, right?"
Why It Happens:
Paper trading has zero consequences. So you trade out of boredom, FOMO, or just to "do something." You take 5-10 trades per day when your strategy only gives 1-2 good setups.
The Real Cost:
In paper trading: 100 trades, 55 wins, ₹50,000 profit
In real trading: 100 trades × ₹40 cost = ₹4,000 in brokerage alone
→ Plus: 30 of those 100 trades were low-quality (taken out of boredom)
→ Result: Your profitable strategy becomes unprofitable
✅ How to Fix:
- Set Daily Trade Limit: Max 2 trades per day
- Define Your Setups: Write down 3 setups you trade
- Track "Opportunity Cost": Best 30 trades vs your last 30
- Calculate Costs: Deduct ₹40 from every trade in journal
Mistake #3: Unrealistic Position Sizes
"Let me buy 50 lots of this option..."
Why It Happens:
Paper trading platforms give you ₹10 lakhs virtual capital. So you trade 10-20 lots because you can. You get used to big P&L swings (₹50,000 profit, ₹30,000 loss).
The Real Cost:
The "Size Shock" when switching:
Result: 1 lot feels "too small" after practicing with 20
→ You overtrade to "feel something" → Blow up account
✅ How to Fix:
- Practice With Realistic Size: If you have ₹1 lakh for real, use ₹1 lakh in paper too
- Use 2% Rule: Risk only 2% per trade (₹2,000 on ₹1 lakh capital)
- Get Comfortable With Small: 1-2 lots should feel NORMAL
Practice Without These Mistakes
Start paper trading on Zerroday with AI feedback on every trade
🚀 Start Free Paper TradingMistake #4: Ignoring Trading Costs
"Costs? What costs? It's all free!"
Why It Happens:
Most paper trading platforms don't deduct brokerage, STT, or taxes. Your ₹500 profit looks great until you realize real trading would've left you with ₹320 after costs.
The Real Cost Breakdown:
Example: Buy & Sell 1 lot Nifty option
→ Brokerage (₹20 × 2): -₹40
→ STT (0.05%): -₹2.75
→ Exchange charges: -₹15
→ GST (18%): -₹10
✅ How to Fix:
- Manually Deduct Costs: After every trade, deduct ₹40-50 in journal
- Use Cost Calculator: Zerodha has free brokerage calculator
- Set Minimum Targets: Don't take trades with <₹200 target
- Track Net P&L: Show Gross AND Net P&L (after costs)
Mistake #5: No Stop-Loss Discipline
"It'll recover... let me hold..."
Why It Happens:
In paper trading, you can hold a losing position indefinitely. But in real trading, that ONE time it doesn't recover destroys your account.
The Math That Kills Accounts:
Why stop-loss matters:
Lose 10%: Need 11.1% gain to break even
Lose 20%: Need 25% gain to break even
Lose 50%: Need 100% gain to break even
Lose 90%: Need 900% gain to break even
Stop-losses prevent you from needing those impossible recoveries.
✅ How to Fix:
- Set Stop-Loss BEFORE Entry: Not after, not during—BEFORE
- Never Move Stop Wider: Can trail tighter, never wider
- Auto-Execute: When stop hit, close immediately
- Track Hit Rate: 40-50% should hit stop-loss
Self-Assessment: Which Mistakes Are You Making?
Honest check (nobody's watching):
□ I'm taking 5+ trades per day (overtrading)
□ I'm using position sizes I can't afford in real trading
□ I've moved/removed stop-loss after entering
□ I don't track costs/brokerage in P&L
□ I've been paper trading for less than 30 days
If you checked even ONE box:
Don't switch to real trading yet. Fix these NOW while mistakes are free.
Fix These Mistakes Risk-Free
Practice on Zerroday with AI-powered feedback
🚀 Start Free Paper Trading