What is paper trading?
Written By: Nick Nguyen | Read full profile
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Me: $200,000 today? Sign me up NOW!
That one person who wants to burst my bubble: ...you do know it’s virtual money right…?
Yes, I know it’s virtual money. But who cares! I’m more interested in getting in on the hype of the stock market without losing any of my hard earned cash.
Paper trading is essentially a way for you to practice trading stocks, learn different strategies, and get to know everything there is to know about the stock market without ever actually using your own money. Most paper trading accounts let you trade real-time in a stock simulator. You’re typically given a large chunk of money to start off with and then you can go crazy, pressing all the different buttons, buying and selling things that are way out of your budget, or even blowing up your account with options trading - yes, you will probably blow it up if you touch options.
But it’s all good, because all that money is virtual! I really wish I knew about paper trading sooner before I blew $500 on my call options (you can read more about that and what NOT to do when trading options in this post here).
Anywho, if you’re new to stocks, placing orders, reading charts, finding the news, ticker symbols...and I guess just completely lost about anything related to trading...start paper trading before you go throwing money at what everyone says is the next biggest stock. Cause man oh man, we did that and lost a ton on Genius Brands (GNUS) and Nikolai (NKLA)...
This doesn’t mean don’t put your money in the market though. I regret not putting my money into index funds and ETFs that track certain indexes. So if you’re just looking to keep it simple, check out my other related posts about index funds, ETFs, and how to use them to invest like a pro.
In the meantime, if you want to learn how to day or swing trade or get burned by options, get it out of your system with paper trading. I personally like TD Ameritrade’s Paper Money account that works with their Think or Swim platform. Check out our video on how to open one here.
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