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What is 3Commas paper trading and how you may use it to improve your trading skills?

5 min
3Commas paper trading


Many people with a talent for trading do not get the chance to discover that trading would be great for them, since they are discouraged by the fact that trading calls for investing real money. This is because they don’t know of a very important practice feature called paper trading.

This article will guide you through the concept of paper trading, from the basics of what it is and how to apply it, to a deeper analysis of its good and bad sides. We will also present services by a crypto trading platform called 3Commas, which is a great option you can choose for both trading and learning about crypto bots.

What is paper trading? 

Paper trading is basically executing real trades with fake money or on a practice account. This means that all the aspects of crypto trading are there and everything functions like in real money trades, except you can’t make or lose any money.

For example, you can replay stocks from the previous day, or rerun past days while playing with paper trades. It is simply a practice mode that is great for beginners and experienced traders alike. In a logical order of things a new trader should do, it is the next step after learning the basics about trading, and it comes before you start trading for real money. It is a great place to take your first steps in the world of trading, as well as come up with more advanced strategies with no risk.  

How does paper trading work? 

There are different ways you can paper trade, depending on your style. The simplest is to write down your trading ideas, or a particular trading tactic, then test it by comparing it to the live market data. You can do this by keeping spreadsheets or even pen and paper, but this is getting increasingly obsolete in modern times due to the growing number of online paper trading services, websites, exchanges, as well as offline software.

There are different paper trading services available. Here is an example of how most user interfaces work, based on the application called TradingView: 

  • Orders: here you can see the current orders placed (picture 1);
  • An option to modify current trades (picture 2 to the right);
  • A live chart with your trades embedded in it (picture 2);
current orders placed
modify currnt trades

Live trading vs. paper trading 

It is pretty self-explanatory that paper trading has the absence of risk as its main advantage. You don’t get punished for losing trades and you can learn from your errors if you simulate and trade on a demo account. Another advantage is the absence of stress and negative emotions. When you are safe from real money losses, you can analyze more clearly and rationally and learn faster.

On the other hand, the downside of no stress and risk is that you can’t know for sure if you are really prepared for the swings and negative sides until you start investing real money. Also, paper trading does not include fees and slippage, so you may get the idea that profit-making is easier than it actually is.  

Live trading is surely more exciting and more profitable. It is the real deal and the reason why you started committing yourself to this niche in the first place. Of course, it comes along with a lot of stress and losses, and if your strategy is wrong, the consequences are much, much worse than in paper trading. To succeed, you need to find the balance between comfort, risks, your trading skill, and the amount of money you invest. 

What is 3Commas? 

3Commas is a crypto trading platform with a number of useful tools that can enhance your trading. You can manage your trading portfolios, use automated bots or build your own advanced crypto bots here. 3Commas connects to various exchanges via an API key. It is listed as a verified application on, with a rating of 4.5/5.

3Commas paper trading 

One of the best features of 3Commas is the futures paper trading options. Now, the main place you always want to go to for trading is the Smart Trading panel, accessible from the navigation menu screen. It looks like a normal trading chart interface, but it also has TradeView indicators embedded into the charts, just like the ones we previously mentioned in our example.  

The very first thing to do is visit the Smart Trade panel to get to the Trading View chart. You can add some of your favorite cryptocurrencies that you want to practice trading with and you can also add indicators. You can change your time frame, and if you want to take a trade, here is what you can do. Instead of waiting for your order to be filled and manually booking profit, you can just sit back and automate the trade, i.e. buy if the price reaches a set percentage above. It all depends on your preference and strategy. 

You can also use bots such as their DCA or Grid bot with your paper trading account, or develop your own bots. Finally, you may reset your virtual funds at any time by deleting your funds from the My Portfolio section and then clicking “Activate” on your paper trading balance bar.  

SmartTrade chart inteface in 3Commas

Is paper trading free in 3Commas? 

You can try out paper trading for free only during the 3-day trial period. Paper trading is available starting from the starter payment plan, and you can unlock different advanced bots and features by purchasing the advanced or pro plan.

3Commas pricing plans

Is paper trading a good practice? 

There are many benefits of taking up paper trading. For one, you can test a variety of your own strategies and options there, and you can also test crypto bots’ quality and mechanics. Furthermore, a great advantage of crypto trading is that, unlike most markets which are open Monday to Friday, you can practice 24/7 on any day.

Most importantly, paper trading is great for beginners. The idea is to get educated about crypto trading first, followed by paper trading, and only then start investing real money. Do not forget to start with minimal stocks and low shares, so you don’t blow up your account and maybe abandon trading forever instead of getting good. 

Can you lose money with paper trading? 

Not directly. As you already know, paper trading has all the elements of real trading and the real stock market, except it is virtual money. However, this does not mean you should approach paper trading as a game. If you develop bad habits through paper trading, you may transfer that erroneous mindset and your bad strategies to the place where it actually matters. You need to learn to understand paper trading as training grounds for real-money trading. Always stay focused and make every second a learning experience. 

Remember that limit orders are always superior to market orders in that they are more reliable, less risky and stressful, and bring a lot more profit potential. With limit orders you set your precise limits, while market orders just get you inside the market, without caring for details of the execution and finding the best buying price for you. This means you can be down in a matter of seconds if you go for orders without limits. Fortunately, you can usually choose to modify your already placed market trades, and manage your trades by setting limits.