There is a right order to take a strategy from idea to live capital. Skipping steps is how avoidable losses happen. The path is simple: paper first, then small live, then scale.
Step 1 — Paper#
Run the strategy in paper mode, where orders are simulated on live market data with no real capital at risk. Paper trading confirms two things a backtest can't:
- The strategy behaves as expected on current, live conditions.
- Its conditions actually fire at a sensible frequency.
Watch it for long enough to see real setups occur. If a strategy places no trades for a while, that is often correct — it is being selective, not broken. See Paper Trading.
Step 2 — Small live#
When paper results give you genuine confidence, switch to live — but start small. Size positions conservatively for the first live runs. Live trading introduces things paper cannot fully model: real fills, real slippage, and your own reaction to real money moving.
- Monitor closely for the first 24–48 hours.
- Keep the risk controls in reach — you can pause or kill the strategy instantly.
Step 3 — Scale#
Only after the strategy has behaved as expected with small live size should you increase it — gradually. Scale in steps, and keep your per-trade and per-account risk limits intact as size grows. A strategy that works at small size does not automatically work at large size if it moves the market or hits liquidity limits.
If something looks wrong#
At any step, you can return a strategy to paper mode, pause it, or kill it entirely. There is no penalty for going back a step — it is far cheaper than pushing forward on a strategy you don't trust yet.
Ready to try it? Get started.