What's the difference between paper trading and live trading?

Paper trading runs your strategy against real live market data with simulated money; live trading uses real cash in a real brokerage account. A good paper environment differs from live in only two ways: fills are simulated (so execution is slightly optimistic — no slippage, no partial fills), and your psychology is unengaged (losses don't hurt). Everything else — data, signals, order logic, timing — should be identical, which is why the same engine should power both. Use paper trading to validate that the strategy behaves as the backtest predicted for a few weeks; use small live size to validate that you can tolerate it emotionally. Both steps catch different failures.