Before any real money is used, the strategy gets tested with simulated money in the live market. This page is the plan for that test, and the honest record of how it goes.
📊 Current Status
NOT STARTED YET
So far the scanner has been tested one way: backtesting. Every rebound time, best entry day, and drop ratio is measured from two years of real price history. The next test is different: follow the plan day by day with simulated money, and compare the results with the predictions. That has not started yet. This page tracks it.
🧪 What Is Paper Trading?
Paper trading means trading today's real market with simulated money. The account starts with pretend cash. The orders are real, the prices are real, the dividends arrive on schedule. The only thing that is not real is the money at risk.
After each trade, the real result is compared with what the scanner predicted. That comparison is the whole point.
🔍 Why the Backtest Is Not Enough
Backtesting looks at the past and assumes perfect conditions. Paper trading finds the things the backtest cannot see:
Hidden cost
What it means
The spread
The gap between the buying and selling price. The backtest uses one closing price; real trades pay the spread twice, once in and once out.
Slippage
The order fills at a slightly worse price than expected, especially on thinly-traded names.
Late rebounds
A stock that historically recovered in 4 days might take 12 this time, tying up the capital and pushing back the next trade.
Dividend changes
A company can cut or cancel a dividend after the plan was built around it.
Order problems
An order that does not fill at all, or only partially, before the ex-date cutoff.
Why this matters so much here: dividend capture earns pennies per share. The target is roughly 1% of the capital per month, and the costs above are exactly the kind that can quietly eat 1%. So the quality of each buy and sell is not a detail. It is the strategy.
🗺️ The Plan, In Detail
Paper trading is also the first step of Stage 2. Interactive Brokers gives every account a free paper version that uses the same connection as live trading. So everything gets built once, and later a switch flips it from pretend money to real money. The work has four phases.
Where the scanner fits
The scanner is the brain of the whole plan. It is the only part that makes decisions. Everything else just carries them out and measures the result. By hand in Phase 1 or automated in Phase 2, the instructions always come from the scanner's morning Rotation Plan, and every result is compared with what the scanner predicted.
This split is on purpose. Smart ideas, like better exits and trend signals, get added to the scanner. The part that places the orders stays simple forever, because simple code is the kind that can be trusted with money. And when Stage 2 finally uses real dollars, the only part making decisions is the one that spent months being checked against reality.
Phase 0: Account setup (one-time, mostly waiting)
1
Enable the paper account
Every Interactive Brokers account comes with a free paper account. It is switched on in the account settings.
2
Match the starting cash
The paper account's cash is set to the same $50,000 the Rotation Plan uses, so the results can be compared one to one.
3
Install the bridge software
A small program connects the computer to Interactive Brokers. For Phase 1, Trader Workstation is the better fit: it has charts and order buttons for placing trades by hand. For Phase 2, the lightweight IB Gateway is enough, since the scanner does the work. Both need the account login, so this step waits on step 1. At login there is one choice, Paper Trading or Live, and that choice is the switch between pretend and real money.
Phase 1: Manual paper trading (can start almost immediately)
Nothing needs to be built to start. The scanner already says what to do each morning.
1
Follow the morning plan by hand
Each morning the scanner prints its Rotation Plan. The trades are placed by hand in the paper account, exactly as written: buy on the planned day, hold through the ex-date, sell once the price is back to even.
2
Log five numbers per trade
For every finished trade, write down: the planned buy price and the real one, the planned sell day and the real one, the dividend received, the net result, and what the scanner predicted. That log becomes the Results section below.
Answers start arriving in the first week, while Phase 2 is built in the background.
Phase 2: The automation (the real Stage 2 build)
Each piece is built and tested against the paper account, one at a time:
1
Connector
The scanner connects to Interactive Brokers, reads the account balance, and sees the current positions.
2
Order placement
The scanner's Rotation Plan is read automatically and the buy order is placed. It starts with simple limit orders; smarter algorithmic order types can come later for better fills.
3
Exit monitor
The position is checked every day, and the sell is placed once the price is back to break even. Smarter exit rules can be added here later, like holding a little longer when the trend is still rising.
4
Automatic trade log
Every trade is written down automatically: predicted next to actual, with the gap. Nobody has to remember anything.
5
Safety rails
The boring but critical part: what to do when an order does not fill before the ex-date cutoff (cancel, do not chase), when the data sources disagree on a price, or when the computer was off that morning.
Phase 3: Evaluate and decide (after 1 to 2 months of completed trades)
1
Compare against the prediction
Each trade's real net result is compared with the predicted range (the 35% and 25% tax columns).
2
Explain every gap
Each miss gets a cause: the spread, slippage, a slow rebound, a dividend change. Costs that turn out to be real and repeat themselves get built into the scanner's math, so the predictions stay honest.
3
The decision gate
If the real results land inside or near the predicted range, the switch flips to real money, starting small. If they keep missing, the flaw was found for free, and it gets fixed before any real dollars, and especially before any borrowed ones.
The one dependency: Phase 0 needs an Interactive Brokers account to exist. Everything after that can proceed without risking a cent.
🎯 What Success Looks Like
One to two months of trades done exactly as the Rotation Plan scheduled them.
The real net results land inside the predicted range (the 35% to 25% tax columns), or close enough that the gap is explained.
No surprises the scanner could have known about: every miss gets a cause and, where possible, a fix.
Only then does it make sense to use real capital, and especially borrowed capital, where a flaw would cost interest on top of losses.
An honest caveat: a month or two of paper trading is a small sample. It cannot prove the strategy works in every market. What it can do is catch the practical flaws that backtesting cannot see, before they cost anything.
📒 Results So Far
No paper trades have been completed yet. This section will fill in as they happen, one row per completed trade: predicted net next to actual net, and the reason for any gap.