In an institutional setting, paper trading is more common. Demo Trading is what we call it in the CFD industry. The term "paper trading" derives from the stock market, where investors who wanted to practice would write down their investment ideas on paper and watch the market movements to see if their ideas worked.
There are many different types of traders, including those who trade in the short term and those who hold positions for the long term. All new traders experience a hesitation when it comes to placing trades, as well as concern about losing money from their trading.

Paper trading, also known as simulated trading or virtual trading, is a practice where investors simulate buying and selling securities without using real money. Instead, they use simulated accounts provided by brokerage platforms or trading software. Participants can test out various trading strategies, practice executing trades, and gain experience in the financial markets without risking actual capital. Paper trading allows beginners to learn the ins and outs of investing, understand market dynamics, and refine their skills before committing real funds. It's also used by experienced traders to test new strategies or evaluate the performance of different investment approaches. While paper trading provides a valuable learning experience, it's important to recognize that emotions and reactions may differ when real money is at stake.