How I Use Alpaca's Free Paper Trading API to Test Strategies Without Risking Real Money

Paper trading is the best free education in algorithmic trading. No tuition. No real money at risk. Just you, your strategy, and real market data. The catch: most paper trading setups are either too simple (a Python script that reads a CSV) or too complex (full cloud infrastructure before you've tested a single idea). There's a middle ground that works well — Alpaca's free paper trading API plus a local strategy runner. Here's how I set it up with TradeSight , and what I learned. Why Alpaca for Paper Trading Alpaca gives you a free paper trading account with a fake $100,000 in capital. What makes it useful: Real-time market data via WebSocket — prices update live, not T+15 min delayed REST API for placing orders, checking positions, account balance Realistic fills — market orders fill at current bid/ask, not the middle Zero cost — the paper account is permanently free The API is clean. Order placement looks like this: import alpaca_trade_api as tradeapi api = tradeapi . REST ( key_id =