There is one big problem with 3. If you test 20 different strategies on paper, just by chance at least one will come out positive.
Exactly. And some Techniques work on a kind of asset, while others don't.
Paper trading allows you to do many strategies and the more you do the higher the chance that one is just lucky.
But it is still the only way to test the probability of one specific strategy have a good return or not.
Also, most of the strategies work on different situations on the market. If you take a strategy that work pretty good on a trending market and use it on a sideway market, you Will probably lose a lot of money.