Differences between live and paper trading?

Wondering if people are getting similar results live as they did with paper? I’m about to go live so wondering if paper is a good indication. I’m on Binance and using the combo bot. Thank you.

No, it is not the same, especially when using market orders (TP and SL triggered with indicators are all market orders) and/or leverage. If the coin has a lot of liquidity it should be close enough as the slippage should be small. But with low liquidity and volatile coins you can get very different results.

Remember that the paper system is just emulating an exchange, is not an actual exchange. The paper exchange will execute the order as soon as it is received, while in reality, they could fail for different reasons (exchange rules, for example).

There are also psychological factors, as watching profit fluctuate in real trading is different from paper trading. I discuss that and more on this help article on paper trading.

After I test a strategy on paper, the next step for me is usually a trial run on a live account and a small budget. Some people skip paper testing altogether and go directly to the trial run for the reasons I discussed above. I do think that paper trading is valuable specially when forward testing variations of the same strategy. It’s also another way to avoid using overfitted backtest results.