Of course paper trading counts. I think that's the best way to get experience. I am fairly new to stocks since i got in the game late and I've been losing money lately but I'm very inexperienced. I need to papertrade for the next month and learn to discipline myself. I have been listening to a lot of people who've made millions with stocks, futures, options and they all experienced a lot of losses before they made their millions.
Seems like failure is a good teacher if you don't give up. Study study study.