Paper to Live: A Checklist Before Real Money

Switch from paper to live trading only after you can explain what the strategy did on paper, why, and how it compares with its backtest, and after you have set up the broker, sized the account and decided in advance what would make you stop. Paper trading proves the mechanics work; it does not prove the strategy will make money. This checklist walks through the checks worth doing before the first real order, in the order they usually come up.

Why a checklist and not a gut feeling

Most people move to real money at the worst possible time: right after a good run on paper. A few strong weeks make the strategy feel proven, and the urge to "not miss out" takes over. A written checklist slows that decision down and moves it from mood to evidence.

The checklist below is split into five parts: results, costs, setup, sizing and exits. You do not need to tick every box perfectly. But if you cannot answer a question at all, that is a sign to stay on paper a little longer.

Part 1: Did the paper results make sense?

The question here is not "did it make money?" A strategy can lose money on paper for three months and still be behaving exactly as designed. The real question is whether what happened matches what you expected.

Checklist

• I have run the strategy for long enough to see it trade several times. A monthly strategy like Big Tech Trend makes only three rebalancing decisions in a 90-day trial. A daily strategy makes dozens. Judge each by the number of decisions, not the number of days. We cover this in how long you should paper trade.
• I can describe why each trade happened. "The market filter turned negative, so it moved to short-term bonds" is an explanation. "It just did" is not.
• The trades look like the strategy description. Steady Growth should only hold its seven fixed names. Gold Breakout should only trade gold. Anything else is a reason to investigate.
• I have compared paper results with a benchmark over the same weeks. As an example, if the S&P 500 rose 6% over your trial and the strategy rose 2%, that is useful context, and so is the reverse.
• I understand that a short paper period is noise. Three months tells you very little about long-run returns, good or bad.

Part 2: Did I account for costs and real fills?

Paper trading is only useful if it is realistic. Paper fills in AlgolaneBots happen at the next real market open, with a 0.05% cost taken off every fill and prices adjusted for splits. That is closer to reality than an instant fill at the last price, but live trading can still differ.

Checklist

• I know which strategies are cost-sensitive. For Gold Breakout, the facts are clear: in historical backtests, doubling trading costs cut its yearly result roughly in half. Strategies that trade often feel costs more.
• I have checked my broker's fee schedule and spreads for the instruments the strategy trades.
• I expect live results to be a little worse than paper, not better. If they come out better, treat it as luck rather than a sign to add more money. Our post on paper trading slippage and costs explains why.

Part 3: Is the broker connection set up correctly?

This is where most practical mistakes happen. Real-money trading needs a working broker connection, the right permissions and a clear picture of who can do what with your account.

For US strategies through Alpaca

• I connected Alpaca through its own sign-in page. AlgolaneBots uses OAuth, so you never type your Alpaca password into our site.
• I understand the permissions. AlgolaneBots can place trades and read positions. It cannot move or withdraw money.
• I know which account is connected. Alpaca offers paper and live accounts. Check the dashboard shows the one you mean.
• I have subscribed and given consent. Live trading stays off until you subscribe, consent and connect a live account. Real-money orders also ask for your password as a final confirmation.
• I know how to revoke access from inside Alpaca if I ever need to.

For more on this route, see automated trading with Alpaca.

For Gold Breakout through MT5

• The Expert Advisor runs in my own MetaTrader 5 terminal, and I have allowed web requests to the site and pasted the one-time token.
• I tested it on a demo account first. During the free trial, the MT5 route works on demo accounts only, which is a sensible place to learn it.
• I have chosen a risk level (1%, 2%, 3% or 5% per trade) and understand what it means. More on this in Part 4.
• My terminal will be running when the strategy needs it. An advisor in a closed terminal cannot act.
• The MT5 route is available where I live. It is not offered in India or sanctioned countries. Paper trading for all five strategies works everywhere.

Part 4: Have I sized the account sensibly?

AlgolaneBots does not tell anyone how much to put in, and neither will this post. What we can do is show how sizing choices changed historical outcomes, so you can think about your own limits.

The clearest example is Gold Breakout's risk setting. These are results from a historical backtest from June 2004 to November 2026, a computer test on past prices. Nobody earned these returns, and future results will differ. Its caveat: doubling trading costs cuts its yearly result roughly in half.

At 2% risk, the deepest fall was 41%, from May 2018 to October 2019, and it took 41 months after the bottom to recover, in March 2023. Gold held over the same full period fell as much as 45%. At 5% risk, the backtest fell 74% at its worst. A higher setting raised both the result and the fall.

Checklist

• I have looked at the worst historical fall for my chosen strategy and setting, and I know how long it took to recover.
• I have imagined that fall happening in my first month, not my third year, and asked whether I would stay with it.
• The amount I am putting in is money I can leave alone through a deep fall. If a 40% drop would force you to sell, that tells you something about sizing.
• I have read the strategy's caveat. Each one has a specific weakness, such as stock lists picked with hindsight or profits concentrated in a single fund.

Our position sizing basics post goes deeper into this.

Part 5: Do I know when I would stop?

The best time to decide your exit is before you start. In the middle of a drawdown, every decision feels urgent.

Checklist

• I have written down what would make me stop. Good triggers relate to the system not working as designed: orders that look nothing like the strategy, a broken connection, a change in your own finances.
• I know where the kill switch is and have tested it on paper. It stops every broker order and tells MT5 to close its trades. See why every trading bot needs a kill switch.
• I know how to cancel. The $29 monthly subscription is cancelled from the billing page, any time.
• I will review on a schedule, not every hour. Checking constantly tends to produce reactions, not decisions.

A suggested order for the first live weeks

This is one sensible sequence, not a rule:

1. Finish the paper trial and review the results against the checklist above.
2. Connect the broker and confirm the dashboard shows the right account.
3. Start with one strategy rather than all five at once, so you can see clearly what each order is doing.
4. Compare each live fill with what paper trading would have shown. Small differences are normal; large ones need explaining.
5. Keep paper trading other strategies alongside, if you are still evaluating them.
6. Review after a set number of decisions, not after a set number of good or bad days.

Common mistakes at the switch

• Going live right after a lucky streak. A strong month on paper says little about the next one.
• Changing settings at the same time as going live. If you move from 1% to 5% risk on the day you start with real money, you cannot tell which change caused what.
• Forgetting that live costs are real. Paper costs are an estimate.
• Not checking which account is connected. Always confirm paper versus live on the dashboard.
• Treating the backtest as a forecast. Backtest figures are historical simulations. They describe the past under assumptions, not what will happen to your account.

Key takeaways

• Paper trading proves the mechanics, not future profits; judge it by whether trades matched the strategy's rules.
• Expect live results to be a little worse than paper because of real spreads and fills.
• Confirm the broker connection, the permissions and which account is connected before any real order.
• Look at the worst historical fall for your strategy and risk setting before choosing how much to commit.
• Decide your stop conditions and test the kill switch before you go live.
• Start with one strategy and change one thing at a time.

Start with the paper part

The first half of this checklist can only be done on paper. Start the free 90-day trial, run the five strategies on a $10,000 paper account, and work through these questions with real prices and no real money at risk. Sign up here; no card is needed, and the trial never turns into a charge by itself. Trading involves risk of loss; read the risk notice before going live.