How to paper-trade a Streak strategy
Paper trading a Streak strategy runs the strategy’s entry and exit logic against live real-time market data, logging simulated orders at current market prices, without placing any actual orders in your Zerodha account. Paper trading bridges the gap between historical backtesting (which uses past data) and live trading (which uses real capital): it tests the strategy’s signal logic under live market conditions, including intraday price movements and volatility patterns that may not be captured in historical data, while eliminating the financial risk of live execution.
Conflict-of-interest disclosure. This guide is published by WebNotes Editorial Team for informational purposes. WebNotes has no commercial relationship with Streak Tech Private Limited or Zerodha. No affiliate commission is earned from Streak subscriptions or strategy deployments.
Risk disclosure. Paper-trading results do not guarantee live-trading performance. Paper trading assumes orders fill at the last traded price at the moment of signal generation and does not account for bid-ask spreads, queue position, market impact, or partial fills. The transition from paper trading to live trading typically produces worse performance than paper-trading results suggest. Treat paper-trading results as directional evidence, not as a performance guarantee.
Prerequisites
Before following this guide, confirm that:
- You have built a strategy on Streak using the condition builder. The strategy should have defined entry conditions, exit conditions (profit target and/or stop loss), and an instrument to trade.
- You have reviewed the strategy’s backtest results and decided the logic warrants forward-testing before deploying real capital.
- Your Zerodha account is active and can authorise Kite Connect access. Streak requires a live data feed even for paper trading, and the feed is sourced through your Kite Connect authorisation.
Step-by-step procedure
Step 1: Open the strategy and select Paper trade
Log in to streak.tech or open Streak from within Kite web. Navigate to My Strategies. The list shows all strategies you have saved or received from Streak’s strategy marketplace.
Open the strategy you want to paper-trade. In the strategy’s detail view, look for the Paper trade button or option. This is typically distinct from the Deploy or Go live button. Selecting Paper trade activates the simulation mode; selecting Deploy would place real orders.
If your Streak plan includes paper trading (check your plan at streak.tech/pricing), the Paper trade option is available. Some free-tier limitations may restrict the number of simultaneous paper-trading sessions.
Step 2: Configure paper-trading parameters
The paper-trading configuration screen mirrors the live deployment screen. Set the following parameters to match your intended live configuration exactly:
Quantity / lots. Set the same quantity you intend to trade live. If you plan to trade 1 lot of NIFTY weekly options live, configure the paper trade for 1 lot. Matching quantities allows direct comparison of notional P&L between paper and live sessions.
Product type. Choose the same product type as your live strategy:
- MIS for intraday equity or F&O strategies
- NRML for overnight F&O positions
- CNC for equity delivery
Square-off time. For intraday (MIS) strategies, set the square-off time to the same value you will use in live trading (for example, 3:10 PM IST). This ensures the paper strategy closes simulated positions at the same time as the live strategy would.
Trading time window. Restrict entry signals to the same hours you plan to use in live deployment (for example, 9:30 AM to 2:30 PM IST). Excluding opening and closing volatility windows is common practice for indicator-based strategies.
Maximum positions. Set the same maximum open-positions limit you will use live.
Matching all parameters ensures that the paper-trading results are comparable to live performance under equivalent settings.
Step 3: Connect your Zerodha account (required for live data)
Streak streams live market data for paper trading through Kite Connect. If your Zerodha account is not already connected, Streak presents the Kite Connect OAuth screen:
- Enter your Zerodha client ID, password, and TOTP.
- Grant the data-access permissions requested by Streak.
No real orders are placed during paper trading; the only active Kite Connect permission used is market data streaming. Order-placement permissions are not exercised in paper mode. Verify this by checking that no orders appear in your Kite order book after a signal fires in paper mode.
The Kite Connect token expires at midnight IST. If you run a multi-day paper-trading session, re-authorise each morning before market open.
Step 4: Activate the paper-trading session
Click Start paper trade or Activate. The strategy status changes to Paper trading or Simulating in the My Strategies view.
From this point, Streak monitors the defined instrument’s live market data for entry signal conditions. When an entry condition is satisfied (for example, RSI(14) crosses below 30 on the 5-minute chart), Streak logs a simulated buy order at the current market price. When the exit condition is triggered (for example, price rises 1.5% from entry or falls 0.75% below entry), Streak logs the simulated exit.
The paper strategy runs continuously during market hours until you stop it or until the trading time window closes for the day.
Step 5: Monitor the paper-trading log
Navigate to the Paper trade log or the strategy’s activity section. The log shows:
| Column | Description |
|---|---|
| Signal date and time | When the entry or exit condition fired |
| Signal type | Entry (Buy/Sell) or Exit (Target/Stop/Time) |
| Simulated fill price | Last traded price at signal time |
| Quantity | As configured |
| Notional P&L | Profit or loss on the simulated trade |
| Running total | Cumulative notional P&L since paper trade started |
Review the log each day. Note the time between signal generation and the simulated fill price: in live trading, execution latency (the time between signal and order placement and fill) may cause slippage relative to the simulated fill price. For strategies that depend on catching rapid intraday moves, this latency can be material.
Step 6: Analyse results and decide on live deployment
Run the paper trade for a representative number of trading days to accumulate at least 20 to 30 simulated trades. A larger sample (50+ trades) provides more statistical confidence. The goal is to observe the strategy’s behaviour across different market conditions: trending days, rangebound days, high-volatility days, and days with macroeconomic events (RBI policy announcements, earnings releases, global market dislocations).
Compare paper-trading results with the backtest:
| Metric | Backtest | Paper trade | Acceptable gap |
|---|---|---|---|
| Win rate | e.g., 55% | e.g., 48–62% | Within 10 percentage points |
| Average profit per trade | e.g., Rs 800 | e.g., Rs 600–1,000 | Within 25% |
| Average loss per trade | e.g., Rs 400 | e.g., Rs 350–500 | Within 25% |
| Maximum drawdown | e.g., Rs 5,000 | e.g., up to 1.5x backtest | Flag if > 2x |
If the paper-trading results are materially worse than the backtest (for example, win rate 20 percentage points below the backtest, or maximum drawdown 3x the backtested drawdown), reconsider the strategy’s design before committing real capital. Common causes of paper-to-backtest divergence include:
- Lookahead bias in the backtest: The backtest entry price was computed incorrectly, using bar-close data that the strategy could not have known at signal time.
- Overfitting to historical data: The strategy’s conditions are too tightly calibrated to past patterns that do not recur in live markets.
- Market regime change: The strategy performs well in a specific market regime (trending, low-volatility) but the live paper period has a different regime.
If paper-trading results are broadly consistent with the backtest, proceed to live deployment. See How to deploy a Streak strategy on Zerodha for the deployment procedure.
Limitations of paper trading
Paper trading on Streak is more realistic than backtesting but still has known limitations:
- No slippage modelling. Simulated fills assume the full quantity executes at the last traded price. In live markets, a market order’s fill price depends on the order book depth; large orders or illiquid instruments may fill at prices meaningfully worse than the last traded price.
- No partial-fill simulation. If liquidity is insufficient for the configured quantity, a real order might fill partially. Paper trading assumes full fills.
- No impact cost. The strategy’s own orders do not affect the simulated market price. In live trading, large orders in less-liquid instruments can move the market against the strategy.
- No broker rejections. Paper trade does not simulate order rejections that may occur live (margin shortfall, circuit limits, expired contracts, freeze quantities on F&O).
Account for these limitations by adding a conservative buffer when comparing paper results to live performance expectations.
What can go wrong
Paper trade signals but no log entries appear. If Streak’s live data feed is disrupted (for example, due to Kite Connect token expiry), the strategy cannot detect signals. Check the broker connection status and re-authorise if needed.
Paper trade results significantly exceed backtest. This can indicate that the paper-trading period coincided with unusually favourable conditions for the strategy. Extend the paper-trading period to include varied market conditions before drawing conclusions.
Confusion between paper and live mode. Verify the strategy’s mode label in My Strategies. A Paper trading label confirms simulation mode. A Live or Active label indicates real orders are being placed. Do not confuse the two, particularly when managing multiple strategies.
Related guides
- How to deploy a Streak strategy on Zerodha
- How to scan stocks on Streak
- Streak platform overview
- Kite Connect API
- Zerodha F&O segment
References
- Streak Tech. “Paper trading on Streak”. support.streak.tech. Accessed May 2026.
- Zerodha Support. “Streak on Kite, paper trading FAQ”. support.zerodha.com. Accessed May 2026.
- SEBI. “Consultation paper on algorithmic trading by retail investors”. sebi.gov.in. August 2022.
- Zerodha Z-Connect Blog. “Streak, algo trading for Kite clients”. z-connect.zerodha.com. Accessed May 2026.