How Long Should You Paper Trade Before Going Live?

The wrong answers

"Six months" — arbitrary. "Until you're consistent" — undefined. "Never, just risk small" — a good way to burn a starter account.

A better answer

Paper trade until you have at least 40 closed trades following your written plan. Not 40 impulses. Forty trades where you can point to the rule that triggered the entry and the rule that triggered the exit.

Below 40 you don't have enough data to know if your edge is real or if you got lucky. Above 40, the sample is meaningful.

What to measure before you switch

Rule-adherence rate. How many of the 40 followed the plan? If it's under 80%, going live will make it worse — real money makes discipline harder, not easier.
Expectancy in R. Positive? Ship. Zero or negative? Keep paper trading and fix the setup.
Max drawdown in R. If you cannot stomach the paper-trade drawdown emotionally, real dollars will break you.

Worked example

40 paper trades, +18R total, 34 followed the plan (85%), max drawdown −7R.

Good signals across the board. Switch to real money — at quarter size for the first 20 live trades. Real-money slippage, emotion, and execution friction cost most traders 20-30% of paper-trade edge. Quarter size lets you rediscover your true edge cheaply.

What paper trading cannot teach you

Real slippage on illiquid names.
The psychological weight of a 3R drawdown when it is your rent.
Overnight gap risk on real capital.

Accept this. Paper trading is for validating a system and building reps on execution. It is not a full replacement for live experience — you cannot skip the real-money apprenticeship, only make it shorter and cheaper.

What you will practice

Write your entry and exit rules in one page.
Take 40 paper trades that follow those rules.
Compute the three numbers above.
Go live at quarter size, or fix the system. Never full size on day one.