One of the greatest failures of the current grade school educational system is in the area of life skills. The necessity for life skills is paramount, it should be where we put our academic skills to practical use. Practicality has found itself pushed aside for higher learning and technical training. Despite this, unless you happen to focus in accounting or economics, the average person has no idea how to manage their money, let alone how the stock market works or how to responsibly participate.
Learning to trade the stock market can be daunting. There are seemingly as many paths to learn to trade as there are stock tickers to pick from. Just like with any education – you get what you pay for “if” you don’t do your research. This adage is especially true when considering a new trading strategy or developing your trading style. Having a “testbed” or “sandbox” to practice in is vital. Luckily there are several to choose from.
When looking to practice your trading skills you can choose from simple to complex. Simple platforms will often allow you to experience real-time simulated prices and order placement. Most of these promote their paper trading platforms as a “game” but the experience is as real as you can get without placing actual monies on the line. Let’s consider three easy ones to learn from that work great for swing trading and longer-term investing.
Investopedia.com’s Stock Market Game
Signup is a piece of cake, simply input your email address, choose a userID and password and you are all set to either join an Investopedia game, join a public game, or create your own. In either category, you’ll find subcategories. The instructions are easy to follow.
- We highly recommend you join at least one Investopedia game.
- You can join as many games as you want.
- You can leave a game at any time.
- Your portfolio is unique for each game, allowing you to run multiple portfolios under one login.
- Anybody can create their own game with different settings. Create a custom game now.
If you are looking to get your feet wet the “Beginners” game is as good as any. The only difference between the games is the game rules and the number of players. They offer a “Learning Center” where you can take free stock tutorials and learn more about the simulator market itself (it really is a world unto itself). Lots of valuable information can be gleaned for both the inexperienced and experienced. … and if you’re inexperienced there’s even a “how-to guide”.
Simply begin by picking a game. Once you’ve picked a game, to start playing is easy; simply click “buy stock”, on the next page enter your stock symbol, quantity on the next page, click “preview order” and you’re off to the races in your first simulated trade. There are additional options to experiment with, learn about the different market order types (market, limit, and stop orders), as well as set the duration of the order (“for the day” or “good until canceled”. While the Investopedia market data is delayed approximately 20 minutes, the data is real. One of the best things about Investopedia is their site is very responsive to page load and the site isn’t overly complex. The speed at which you can navigate the site is really nice. Do know there are some serious players despite being a game. There are over 150,000 players in the “Warren Buffet Million Dollar Challenge” and over 900,000 in the “Beginners” public games.
For fun I created a game here to practice in. Feel free to join in:
I recently joined a FREE online stock simulator game where I can learn more about investing by actually buying and selling stocks with virtual cash.
I’d like to invite you to join the game named SMT Small Account Championship as well. To sign up and to join the game right now, click here.
MarketWatch.com
A part of the DOW JONES Network, MarketWatch provides not only investing news but also a chance to develop and practice your trading prowess. Signing up for an account is easy, email, userID and password (do take note of the limited use of special characters) and you’ll get a verification email. Once you have verified your email, click on the account icon in the upper right and then on “Games”.
Once you are logged in and under “Game”, you have can choose to “FIND A GAME”, “CREATE A GAME” or join one of your existing games (“YOUR GAMES”). Creating a game is similar to the previous example. There are four popups during the setup. Be sure to scroll all the way down during the setup process for all the options, especially on the 4th setup screen to click “CREATE GAME”. Once created make sure you click the “JOIN GAME” on the “overview” tab and you’re all set up.
When you’re ready to add a stock order simply enter your “ticker” symbol in the “Symbol Search / Trade” field and select “Trade” for your ticker (several may be pulled up).
MarketWatch’s trade order form is pretty straightforward. Enter the number of shares you want to buy with your monopoly money, select either “day order” or a “good til canceled” order, the “price type” and “submit order”. The MarketWatch screens are intuitive and have lots of information that is easy to read. You can join multiple games, have a “game discussion” window and develop a watchlist – all of which can be controlled and monitored in the portfolio window. All of the information is conveniently located. You are welcome to play along in the “Scientific Method of Trading “, or select from a host of other public games.
HowTheMarketWorks.com
What a URL, and likewise, what a great site. You’ll have to endure a ton of targeted ads, but there is a wealth of information on the site that makes it worth it when used in conjunction with the word “free”. To get started click on “CREATE ACCOUNT” in the upper right.
After clicking “create account” you’ll have the option to make a trade, make a contest or join a contest, and if you are the least bit confused options on how “TheMarketWorks”… works. The site looks to answer your questions progressively as you advance from screen to screen and doesn’t an excellent job of it, aside from all the banner ad distractions.
Note: if you elect to join a game you can progress straight to making your first simulated funny money purchase.
Entering an order is in good keeping with the other sites. The order area (ignoring all the ads) is clear and very usable. It even includes a graph and some metrics for the day as a reference for your trade decision. While having no focus on decision-making metrics, there is an education system you can take advantage of to increase your market knowledge. You can try your skill in the Scientific Method of Trading game here as well.
WallStreetSuvivor.com
The WallStreetSuvivor.com website has been reworked somewhat and has a faster data feed. Wall Street Survivor offers step-by-step courses, articles, videos, and a real-time simulator – advertised to “help you develop the skills you need to learn how to invest SUCCESSFULLY in the market.” Like all the previous site descriptions above you have to create an account with an email address.
Every time I tried to create an account using the “Open your $100,000 practice account” I would get an error message. Be patient as site has recently been updated, you can still get.
The workaround is to simply click down in the body of this page on “Let’s start trading …” in step 2. Once there you’ll be greeted with the registration page. You do not have to put any checks in the offers towards the bottom, they are not necessary to create an account. Be sure to check your email and validate the account creation.
When you click on the validation link it will take you to a login screen, upon logging in you’ll be treated with:
A neat feature when you first log in is a welcome message and a quick tour guide to the interface. You’ll also get a screen tour of some of the basic functions which are quite useful if this is the first time using a simulator.
Trading stock is very similar to the other simulators. Enter your ticker symbol, quantity, and order type.
All three of these are on par with one another when it comes to a simulated trade. MarketWatch has the best in financial news, WallStreetSuvivor.com the best educational material and they are currently running a monthly contest. WallStreetSuvivor.com seems to have an advantage when it comes to a current stock price.
If you’re not practicing your trading skill you’re basically putting your money down the drain. Your probability of making money are on par with that of a lotto ticket. Do you enjoy “scratch-offs”? Would you gamble your mortgage payment on the flip of a coin? You and only you are responsible for your actions – practicing your tradecraft is prudent. When you want to learn to trade, check out TastyTrade – they have a FREE trading program, and when you’re ready to – open a trading account TastyTrade, they have an awesome platform (TastyWorks). If TastyWorks is too much, consider Webull or Robinhood. Think or Swim and Webull both have paper trading capabilities as well, these will be covered in a follow-up article.
Image attribution:
“Money” by Got Credit is licensed under CC BY 2.0
“Arranged Money” by Anil Mohabir is licensed under CC BY-SA 2.0
“Throwing Money Away” by Images_of_Money is licensed under CC BY 2.0