We are all familiar with the phrase, “practice makes perfect”, but does that really apply to successful stock trading? The answer is yes. It applies not only to successful stock trading, but success in any area you wish to improve or master.
It's very easy to get started with practice stock trading by using a stock trading simulator. A stock trading simulator can usually be obtained for free from most any online stockbroker. The simulator allows you to do online virtual stock trading.
Your first step would be to go to your favorite broker or brokers and request a free stock trading demo account. This account will closely mimic a real money account except that there is no real money involved. Any gains or losses made inside such an account are done so with “virtual funds”. When you're just starting out this gives you an excellent opportunity to learn by doing without having the pressure of financial risk.
Used the right way a virtual stock trading account can really help you learn stock trading. Here are a few steps to help you get started:
Contact several brokers and request a free virtual stock trading account – This will have an opportunity to compare the platforms of several different brokers and see which features would be best suited for your trading.
Trade realistically – What I mean by this is simply trade as if it were real money in the account. In other words, don't just wing it. Follow your stock trading system exactly and make certain that you take every trade. Remember that it's easier to talk yourself into not doing as your system dictates when there is no real risk of financial loss involved.
Keep detailed records – Keeping detailed records is just good business. If you are using more than one stock trading strategy in a single account then you will need to make certain that you keep track of each strategy's equity separately. Why? Because you want to judge the effectiveness of each trading strategy based upon its individual merit. In this way you can find out if every strategy is pulling its weight towards the total equity. You'll also be able to see how well the strategies work together combined in a single trading account.
The key to making practice stock trading work for you is to trade your virtual stock trading account as if the money in it were real. In this way you will be respectful of the risks involved and get a more realistic overview of your chosen trading strategies future profit potential.
Leave a Reply