The best way to learn how to become a proficient stock trader is to practice on a virtual trading platform. Paper trading on a virtual stock trading platform will help you learn the ins and outs of how stock trading works and will also help hone your skills on specific strategies you will use down the road. Virtual stock trading just adds a slightly different element to paper trading, giving you a little more of a realistic feel.
VIRTUAL TRADING ACCOUNTS
There are many companies out there that have virtual trading accounts where you are given a portfolio when you sign up and you compete against other traders for cash and prizes. This competition will help you get a little taste of the emotion side of stock trading that you don’t get paper trading alone.
When you lose money in a fantasy competition, you are actually losing something due to the competition against other traders. This emotional aspect will help give you experience on dealing with and controlling those emotions while trading stock strategies. If you lose while paper trading, you aren’t really out anything, so it is harder to simulate the emotional aspect of winning and losing.
PRESSURE
The majority of traders struggle the most with the emotional side of trading. What separates the successful traders with everyone else is being able to control those emotions. It is important when you practice regardless if you are using a virtual account or just paper trading, that you are treating it as if you were live trading. It is important to feel that emotion as much as possible.
We recommend virtual stock trading as long as it takes for you to become consistent and confident. Too many people dive right into live stock trading and begin to lose money, get discouraged, and usually develop a fear of trading. They either get frustrated and quit or they run out of money. It is hard to overcome these feelings so it is important to start out slow and on the right foot. You will be a more successful trader if you take it slow and build a strong foundation.