# How to Start Paper Trading on Liquid

> Trade real markets with simulated funds. Learn how to turn on paper trading mode, which markets it covers, how to reset your practice balance, and where its limits are.

- Canonical: https://www.liquid.trade/learn/how-to-start-paper-trading-on-liquid
- Published: 2026-10-07
- Category: Education
- Tags: Guide, Beginner, Trading, Paper Trading

---

**To start paper trading on Liquid, sign in to your account, open Settings, select the Trading tab, and turn on Paper trading mode.** Your account switches to a simulated balance — $10,000 to start — and every order you place fills against live market prices without touching real funds.

Paper trading is the fastest way to learn the trading controls, because the practice environment is the same terminal you will use for real. This guide covers how to turn it on, which markets it simulates, how to reset your balance, and the few things it does not cover. It uses the web layout at [app.liquid.trade](https://app.liquid.trade); mobile layouts and controls can differ.

## 1. Check which markets paper trading covers

Paper mode simulates the markets that run on Liquid's own trading engine. Search automatically hides unsupported markets while paper mode is on, and if you open one — for example from a saved link — the app moves you to a supported perp market for the same asset instead.

<CompareTable
  caption="What you can and cannot practice in paper mode"
  columns={["Market", "Paper trading", "What to check"]}
  rows={[
    { label: "Crypto perps", values: ["Supported — BTC, ETH, SOL, and other perpetual markets", "Leverage, margin mode, funding, and liquidation estimate"] },
    { label: "Stock, index, commodity, and FX perps", values: ["Supported on Liquid's own markets", "Trading hours, venue, and live market status"] },
    { label: "Prediction markets", values: ["Supported — event contracts with simulated funds", "Contract terms, resolution rules, and price as implied probability"] },
    { label: "Crypto spot", values: ["Not simulated yet", "Switches to a perp market when paper mode is on"] },
    { label: "External venues (Ostium, Lighter, Kalshi)", values: ["Not simulated yet", "Hidden from search; opening one moves you to a supported market"] }
  ]}
/>

<Callout variant="info" title="Contests work differently">
Trading contests also run on simulated balances, but contest entries are separate from free paper mode. Prediction markets are not available inside contests, and contest balances follow the contest's rules — you cannot reset them yourself.
</Callout>

## 2. Turn on paper trading mode

1. Sign in to the account you want to practice with.
2. Open **Settings** and select the **Trading** tab.
3. Scroll to **Paper trading mode** and turn the switch on.

A green **PAPER TRADING ACTIVE** banner appears across the top of the terminal, and **Available to Trade** shows your simulated balance instead of your real one. Your real funds are not moved or locked — paper mode only changes which engine your orders go to.

<Clip
  src="/images/blog/the-beginners-guide-to-trading/b1-paper-trading.mp4"
  poster="/images/blog/the-beginners-guide-to-trading/b1-paper-trading.png"
  alt="The Liquid trading screen on Bitcoin. The settings icon in the top bar opens a Settings dialog; the Trading tab is selected and the panel scrolls down to a Paper trading mode switch. Flicking it on closes back to the trading screen, where a PAPER TRADING ACTIVE banner now runs across the top and the ticket reads Available to Trade 10,000.00 USD. A size of 500 is typed into the ticket and the Buy BTC button is pressed. The order fills: the chart gains a LONG at 84,608 marker, Available to Trade drops to 9,500.33, and a position row appears showing 0.0059 BTC, 499.18 dollars of margin and a liquidation price of 42,304."
  caption="Settings → Trading → Paper trading mode, then a $500 buy that fills. The money is simulated; the prices, the fill, and the liquidation price are real."
/>

If a paper trading contest is active, the toggle is paused until the contest ends or you leave it — contests take precedence over free paper mode.

## 3. Place a practice trade

Practice trades use the same order form and the same account tabs as live trading. Pick a market you actually follow, enter a size, and check the margin, leverage, and liquidation estimate before you select Buy or Sell.

- For a full walkthrough of the order form — direction, order types, size and leverage, take-profit and stop-loss, and confirming a fill — follow [How to trade on Liquid](/learn/how-to-trade-on-liquid).
- For event contracts, follow [How to trade prediction markets](/learn/how-to-trade-prediction-markets).

After you submit, check **Positions** for the filled position and **Open Orders** for anything unfilled. Everything in Positions, Balances, Trade History, and Order History reflects your paper account while the banner is up, so you can practice the full workflow — entry, exits, partial closes — end to end.

## 4. Reset your practice balance

If your paper account runs low or you want a clean slate:

1. Open **Settings** and select the **Trading** tab.
2. Select **Reset balance** under Paper trading.
3. Confirm the reset.

Resetting wipes your paper positions, orders, and fills and returns the balance to the starting amount. It is permanent — there is no undo. Reset is only available in free paper mode; contest balances are fixed by the contest.

## 5. Turn it off when you are done

Turn the **Paper trading mode** switch off in Settings, or press the green banner itself. The banner disappears and Positions and Balances show your real account again. Your paper positions stay stored, so they are still there if you turn paper mode back on.

<Callout variant="warn" title="Always check which mode you are in">
Before a real trade, confirm the PAPER TRADING ACTIVE banner is gone and Available to Trade shows your real balance. Before a practice trade, confirm the banner is up. The order form is identical either way — the banner is the only sign of which money you are using.
</Callout>

## What paper trading does not teach you

Paper mode fills at live market prices, but it is still a simulation:

- **Fills are guaranteed liquidity.** A large real order can move the market or fill partially; the simulation assumes your order fills. Real fills can also slip on price.
- **The stakes are missing.** Reading about a 50% drawdown and watching your own balance drop 50% feel completely different. Practice sizing as if the money were real, or the habits will not transfer.
- **Fees and funding are modeled, not exact.** Check the live market's rates before assuming a real trade's costs match what you saw in practice.

When the mechanics feel second nature — you can enter, exit, and set stops without thinking — the next step is a small, real position. Follow the [funding guide](/learn/how-to-fund-your-liquid-account) when you are ready, and keep sizes small at first.

[Start paper trading free →](https://app.liquid.trade) · [Read the beginner's guide →](/learn/the-beginners-guide-to-trading)