The Option Alpha Podcast 242: Checklist Before Going "Live" With Real Money
10 snips
Jan 5, 2026 Transitioning from paper trading to live trading brings unique challenges. Understanding the limitations of paper trading is key to managing expectations. Liquidity and slippage can significantly impact your fill prices and returns. Remember, submitting orders doesn’t guarantee fills, so realistic pricing is essential. It's crucial to plan for in-the-money positions and keep your trading accounts synchronized. Most importantly, discipline and sticking to your strategy through emotional roller coasters is vital for success.
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Paper Trading Never Equals Live Markets
- Live markets behave materially different than paper trading and cannot be fully simulated.
- Be overly pessimistic and conservative in paper testing so real trading surprises are less damaging.
Conservatively Adjust Paper Results
- Test paper strategies with conservative fills and assumed slippage instead of always using mid prices.
- Lower your expected gains from paper results to set realistic live expectations.
Check Liquidity Before Trading Tickers
- Check liquidity metrics (open interest, volume, bid-ask spread) before trading any ticker.
- Use community data to estimate average fill position and expected slippage per symbol.