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Not surprisingly a lot of new traders get their feet wet by first taking trades on paper and recording theoretical results. Probably half of all new traders that we work with take this approach in the beginning. Often though, success on paper looks easy and these traders are tempted to risk real dollars before they have really had their confidence tested.
Trading on paper can be deceptive, and after a few profitable trades in a row (on paper), people tend to feel like they are missing out by not having actual dollars in the market(s). Unfortunately a really important part of being a good trader has to do with keeping your perspective when you go through losing periods, which are inevitable. Unless you have seen yourself and your trading methods go through a number of these profit/loss cycles, it is hard to have this perspective.
For most people, it is probably a good idea to paper trade for at least 3-6 months before risking real money. Some people get bored with this, of course, and simply choose to "pay their tuition up front." This trial-by-fire approach will help hold your interest, but obviously, it can be expensive.