Stimulate Your Skills With Simulated Trading
No matter if you’re a professional stockbroker or totally new to the game, no one knows the stock market inside and out. Picking out trends and tendencies is a familiar process in trying to figure out how to invest, but still no one can pinpoint an investment perfectly. Being successful in the stock market is much more than just picking your favorite company and hoping they do well. A ton of research and education has to go into your educated guess. A great toll for making such decisions is an options trading simulator. Practicing certainly won’t make perfect when it comes to the stock market, but the tool serves a purpose unmatched by other education stock market tools.
Yes, when you use a trading simulator, you’re using fake money, or no money at all. For this reason, the element of emotion is taken out of the process. This could be both a good thing and a bad thing. When you don’t have skin in the game, it’s easy to think about the concept of holding when prices drop, because they’re bound to go back up again. If you start to get nervous and sell your stocks when the values dip, you’re putting yourself in a situation where you can’t win. Someone without attachment to the money would know this, but if you’re watching your bank account dwindle, short-term emotion might persist.
Using an options trading simulator however can give the user a significant investing education. Platforms like the one offered at ETNA, include streaming quotes, charts, and news to go along with your own trading portfolio. You’re more inclined to make risky decisions that you wouldn’t make if you were dealing with your own real money or the money of clients. ETNA’s option trading simulator even has a customization platform and the ability to switch to a real money account with a broker.
A trading simulator provides a safe place to learn about the market with the plus of real interaction. School course work on the topic is great, but there’s nothing closer to the real thing than a simulator. Trying out new strategies before you execute on them is a great way to test out theories. It’s also good to practice doing things you’ve never done before. If you’re a broker, you’ve most certainly shorted a stock or worked with futures and commodities. If however, you haven’t, that’s not something you want to try for the first time with a large chunk of money. By first doing it on a simulator, you learn the in’s and out’s of the process along with what not to do, and what to do. Making a mistake is not detrimental when you’re not using real money.
Many high schools are now promoting the use of virtual stock market simulators to give students the idea of how volatile the market could be. Many classrooms engage in a competition like atmosphere, where the student who ends up with the most “money” in their account at the end of the school year wins a prize. Students are encouraged to use all the different investment strategies and perform outside research on the different companies they can buy. This type of simulator is only the basic version of such.
With the market as volatile as it is right now, it’s a good idea to play with virtual money before spending the real thing. Many analysts believe we’re heading into a bear market, as our 9-year old bull market is beginning to wind down. More than ever, the future of the market is uncertain. Now is not the time to try something new with your money, rather try it virtually. There’s no shame in gaining experience and information before making a decision regarding your hard earned money. In the long-run, it’ll make you a better investor.
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Nice Blog, useful content for investors.
Thank @Akash chopra
Its really a good and helpful blog it also helps the beginner. Thanks Sashi for such interesting blog.
Thanks @Jatin for reading our post.
Hi Sashi, I think a simulator serves a good purpose for absolute novices , I’m talking about people who barely know what a stock is, or under strict control for those serious about investing. Otherwise it’s way too easy to flirt your risk management rules and just take massive ‘$100,000,000’ positions in a penny stock for the adrenaline rush.