It’s called a “paper trade” because it started back in the day before computers. A paper trade is simply a simulated trade to buy and sell stocks (without risking money).
Paper trading provides a great way to gain exposure to the stock market, but as with everything, there are advantages and disadvantages.
The biggest pro of paper trading is that you risk zero money! If you wanted to buy a thousand shares of Apple in real life, you’d need to spend over $100,000 (as of now)!!! However, now you can take a chance with your paper money to see what happens and risk no money.
Going along a similar vein as the first pro, you can try new trading strategies risk-free because you don’t risk any money. Maybe you think you found a way to do futures trading effectively.