Simulated Stock Trading:
Do You Want To Test Your Skills In Advance?
You can open a Simulated Stock Trading account at many online brokers or you can set up one on your own. This is a good way to practice trading if you want to test things out ahead of time.
Many times you will see other terms being used such as: virtual stock trading; virtual stock exchange and sometimes paper trading. All relate to being able to place buy and sell orders without risking any money.
Beginning and experienced traders both use Simulated Stock Trading accounts. The benefit of this type of trading of course, is that you can try out different trading methods to see what works and what doesn't, all free of the risk of losing actual money.
What you have to keep in mind though, is that without the potential for a loss of money, a big part of the trading experience is missing, the psychological and emotional aspect.
When it comes to actually trading, having new risks involved has a much different effect on your emotions. You have to understand this ahead of time so that you can train yourself to stick to your plan at all times. When the time comes for real live trading, you can trade just as you practiced with your simulated account.
Sometimes opening this type of account at an online broker requires you to open a cash trading account at the same time, while others let you open a specific account for simulated purposes only.
Besides setting up an account with an online broker, you can also set up a virtual account by creating positions using websites such as Yahoo! Finance or Google Finance. Just go to their websites and create your portfolio. If you have an account with them, it will keep track of your positions for you.
You can also do your own Paper Trading. This is just as it sounds, you keep track of simulated buy and sell trades on paper. You can track your positions over time by researching them on the internet, while keeping notes as to why you bought the positions you did and why you sold them.
Either way you choose, it is a good idea to keep written notes as to why you made certain decisions to buy and sell, so you know which plan to stick with.
- Simulated Stock Trading and Portfolio Updates: Taking a look at the importance of setting up a method to receive Portfolio Updates, even in a Simulated Trading Account.
- Potential Prizes: Besides learning how to trade stocks and use a portfolio, there's various opportunities to earn/win prizes.