Practice Investing By Paper Trading

Paper trading is a virtual trading platform used to conduct investments without using real money. Brokers provide these simulators to investors where they can practice trading and test different methods before risking their cash in the market. This platform gives you access to trading in the market in real time to give you the feel of trading risk-free. See list of online brokers here.

Reading stock market books to learn terminology and trading methods helped me tremendously before I began to paper trade in the real market. I would apply what I learned by conducting trades to see which methods worked better than others. With time you will know what works for you and what doesn’t.

One method that makes the next person successful may not be what is best for the other trader.  In my case, I have developed my own style that gives me the best results and I stick with it.

With paper trading it is so easy to get carried away with unrealistic scenarios that you would not necessarily do in real life. For example, I personally do not think it makes sense to buy 10,000 shares of a stock in paper trading when in reality I would only purchase 100 shares of that same stock. I know it is fake money but at the same time I want to emulate the same moves I would make with my real cash.

Remember that virtual trading is used to simulate the exact moves you would make when investing your real money so it is critical to always take that into consideration with each buy or sell.

The most important thing that paper trading helps me with is increasing my confidence as an investor. That area has significantly improved since the beginning stages of trading. I really took the time to educate myself about the stock market and as an experienced investor I am still learning till this day.



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By Krystle Hall

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