We are all familiar with the age-old saying, “practice makes perfect”. This is especially true in the arena of the stock market. The good news is that you can practice stock trading and become proficient all at no cost to you.
It's very easy to start practicing your trading skills in order to become successful. Let's take a look at how you can get started quickly and easily.
The very first thing you'll need to do is to open up your free practice account. There are any number of brokers who make these accounts available to you. You can also find these types of accounts in many of the free stock trading games that are readily available for you to participate in.
So how exactly does practice trading work? Excellent question. Practice accounts are set up very much like real accounts except that there is no “real” money involved. They use “virtual” funds in these accounts. What that means is that there is no financial risk to you because the money is not real. Getting involved is relatively simple as all you have to do is sign up for your virtual account. Typically you can open up these types of accounts and are instantly provided $100,000 in virtual cash.
Once you've opened up your account you will ask yourself, “what is the best way to use my practice account to be a better trader?” There are right and wrong ways to use your account. If you're looking to become a better trader the wrong way to use your account is to trade in a haphazard, undisciplined, devil-may-care fashion. The right way to use your account is to first become familiar with reading stock quotes, placing orders, etc. By familiarizing yourself with order placement you can help to eliminate many needless mistakes that you might otherwise make if you are not familiar with your online practice account platform.
The main and most important thing you should be doing is testing out your trading ideas and watching the results very closely. The smartest possible thing you could do is to follow your trading plan or strategy in the exact same way as you would if you were trading using real money. This really gives you a leg up because by doing this you will have a more accurate idea of how things may play out once you start trading and having real money at risk.
Used correctly a practice stock trading account can definitely put you on the path to being a successful trader. Something extremely important keep in mind is that often times controlling your emotions when there is nothing at risk is decidedly different than controlling your emotions when you have real money at risk. Some have said that practice trading can be a lot like target practice, but real-world, real-money trading is a lot like target practice except the target actually shoots back.
Leave a Reply