- Что такое Paper Trading
- Настраивается в два шага
- Позволяет получить схожий с реальной торговлей опыт
- Несколько ограничений
- Немного вопросов и ответов
- Paper Trading
- What’s Paper Trading is Good For
- How to Paper Trade
- Practice Being a Liquidity Provider
- Benefits of Paper Trading
- Downsides of Paper Trading
- Transitioning from Paper to Cash Trading
- What is paper trading? Advantages & Disadvantages
- Disadvantages of paper trading
- Should you use paper trading?
- Paper Trading main FAQs
- Best Paper Trading Platforms
- What is Paper Trading?
- Why Use a Paper Trading Platform?
- What to Look for in a Paper Trading Platform?
- Order Flexibility
- Portfolio Tracking
- Our 3 Favorite Paper Trading Platforms
- Investing Strategies That Work!
- What is Paper Trading & Paper Money?
- Why Should You Practice Stock Trading?
- How to Set Up a Paper Trading Account
- How to Get a Free Thinkorswim Paper Trading Account with a 0,000 balance
- Step 1: Visit the Thinkorswim website and simply click «register here for paperMoney»
- Step 2: Register for a paper trading account
- Step 3: Fill in your information
- Step 4: Review your information and create an account
- Step 5: Download the thinkorswim trading platform
- Step 6: Activate your paper trade account
- Step 7: Install the trading software and enjoy your free trading account
- How to Add
,000,000 to Your TD Ameritrade Paper Money Account
- How To Use Thinkorswim to Practice Trading Stocks
- The Bottom Line
Что такое Paper Trading
Paper Trading это торговля с использованием виртуального баланса. Нет необходимости открывать и подключать счет биржи, нет необходимости вкладывать реальные средства.
- Попробуйте торговлю;
- Оцените возможности 3Commas;
- Практикуйте свои навыки торговли;
- Проверяйте торговые стратегии;
Чтобы опыт торговли на Paper Trading был полезен, он полностью повторяет все движения цены с реальных торгов. Разница только в том, что убыток и прибыль не отражается на вашем реальном балансе. Баланс Paper Trading можно сбросить в любой момент.
Настраивается в два шага
1. Нажмите «Активировать» в верхней панели сайта;
2. Подтвердите. Готово.
Теперь можно создавать ботов и Smart Trade на этом аккаунте. Это делается полностью аналогично тому, как и для реальной биржи.
Позволяет получить схожий с реальной торговлей опыт
Реальные торги на бирже требуют наличия реальных средств для торговли. Нужно иметь средства для покупки, нужно иметь монеты для продажи. Всегда должен быть кто-то, кто купит монеты, и всегда должен быть кто-то, кто их продаст.
Всегда должен быть продавец, чтобы удовлетворить спрос покупателя. Всегда должен быть покупатель, чтобы удовлетворить спрос продавца. Чтобы оказаться на одной из этих сторон, вам необходимо перевести реальные средства на биржу. Только тогда можно выступать в роли продавца или покупателя.
Если торговля приведет к потере средств, их невозможно вернуть.
Торги с использованием Paper Trading Требуют наличия средств для торговли, подобно реальным торгам. Главное отличие в том, что эти средства можно получить без перевода реальных денег на торговый счет.
Достаточно нажать одно кнопку, и у на счету уже есть, к примеру, $10000. Открыли неудачную сделку, потеряли все средства? Нажмите кнопку и начните с нуля.
Прибыль, конечно, тоже вывести с такого аккаунта нельзя, к сожалению.
Paper Trading использует данные с реальных торгов. Цена торговых пар на Paper Trading будет идентичной той, которая сейчас на реальных торгах.
История цены, ее текущие движения, и ее будущие движения будут тоже одинаковыми с реальным рынком. Хорошие новости для BTC и его цена уже близко к луне? На Paper Trading будет также.
Плохие новости для ETH и он уже упал в два раза? На paper Trading будет также.
Опыт полученный на Paper Trading будет актуальным для реальных торгов. Можно изучить технический анализ используя Paper Trading, и этот навык будет актуальным на реальных торгах. Весь функционал 3Commas работает одинаково как для реальных торгов, так и для Paper Trading. Если вы изучите Smart Trade на Paper Trading, то вы не заметите разницы после перехода на торговлю с аккаунтом биржи.
Это самая первая версия Paper Trading на 3Commas. Мы планируем улучшать этот функционал в будущем, но сейчас есть такие особенности:
- Нельзя добавить более одного аккаунта Paper Trading;
- Доступно только несколько торговых пар. Они повторяют часть пар с биржи Binance;
- Портфели не работают с Paper Trading.
Следующая особенность не будет заметна на высоколиквидных рынках вроде USDT_BTC. Но ее нужно учитывать, когда будут в Paper Trading будут доступны низколиквидные монеты.
- Нет учета размера ордеров, нет учета книги ордеров, нет частичного срабатывания ордеров. Все ордера моментально срабатывают, когда цена достигает их уровня. Размер на скорость исполнения ордера не влияет. Ордер размером в 0.1 BTC и 10 BTC сработает с одинаковой скоростью, что отличается от реальных торгов. На реальных торгах это займет разное время. Это влияет на работу возможностей с трейлингом и на рыночные ордера. Рыночный ордер на реальных торгах может исполниться по значительно худшей цене, чем планировалось. Подобное случается, если в книге ордеров на бирже нет необходимой ликвидности для исполнения вашего ордера по нужной цене. На Paper Trading это выглядит так, будто бы всегда есть кто-то, кто купит или продаст любой объем по самой выгодной цене. Все возможности с трейлингом используют рыночные ордера, именно по этому они могут работать слишком идеально на Paper Trading.
Немного вопросов и ответов
В: Будут ли доступны другие пары?
О: Да, мы планируем добавить все пары.
В: Будут ли доступны другие биржи, кроме Binance?
О: Еще неизвестно.
В: Можно ли будет добавлять более одного аккаунта Paper Trading?
О: Еще неизвестно.
В: Есть ли какие-то отличия в работе 3Commas на реальных торгах и Paper Trading?
О: Да, на Paper Trading нет симуляции ликвидности. Высоколиквидные пары вроде USDT_BTC хорошо работают и без этого. Разница будет заметна только на низколиквидных парах, но они пока совсем недоступны с Paper Trading. Выше есть более подробное описание ограничений.
В: Будет ли симуляция ликвидности для более реалистичных торгов на низколиквидных парах?
В: Как сбросить баланс аккаунта Paper Trading?
О: Удалить аккаунт и добавить его обратно. Более удобный способ будет в будущем.
В: Какой начальный баланс аккаунта Paper Trading?
В: Как добавить больше средств на аккаунт Paper Trading?
О: На странице «Мои Биржи» нужно найти аккаунт Paper Trading и перейти в просмотр статистики по нему, это делается нажатием на кнопку с иконкой глаза. В верхнем правом углу страницы статистики будет кнопка с иконкой «$», по ее нажатию на счет добавится $1000.
В: Paper Trading доступна только после оплаты?
О: Да, необходимо оплатить один из тарифных планов.
Paper trading is the act of planning entries and exits without spending real money.
New traders or traders who wish to test out new indicators are well advised to start with paper trading. Paper trading is the simulating of real trades on paper or with paper money.
Seasoned traders with over a decade of experience understood paper trading as taking simulated trades in a notebook, meticulously jotting down buy or sell orders they would normally place with a broker. Traders would try to be as accurate as possible, jotting on the time, size and price of a trade they would make.
Once in a position, the trader would monitor and manage the position until it was closed. Usually, the results would fare much better than reality, as the traders soon discovered once they go live with real money at stake.
Thanks to technological improvements in trading platforms, most online trading platforms offer a simulator to perform paper trading. In this case, paper refers to the money. The simulators now provide real-time quotes and executions live market data.
What’s Paper Trading is Good For
Paper or simulator trading can help develop skill sets and solid trading habits, if done properly. Traders should be fully aware that paper trading results should not be considered remotely close to reality. It is simply a tune-up to prepare for real money trading.
The goal of paper trading is to focus on spotting and reacting to technical trade set-ups. Measuring progress should not be how much profit is made but on the accuracy of the trades and winning percentages.
Accuracy and consistency is attained through proper repetition of solid techniques through every market-trading climate. Paper trading can help train your eye to spot set-ups quicker and improve reaction speeds in real-time. It also trains the trader to manage the trades.
It takes the emotions and fear of loss the equation, thereby allowing the trader to focus solely on how the trade plays out.
How to Paper Trade
Once you are signed up with an online broker, download the demo software and proceed to set-up your charts and indicators. Treat it a real trading account. You should practice trading a core basket of stocks with good volume and price movement that correlates with the S&P 500. The sample core basket as mentioned under the watch list can be used.
Practice with just one or two set-ups until you are able to spot and trade them consistently. Try to maintain a 75% or more win rate. Don’t get over confident or build large size positions. Always keep in mind that the fills won’t be accurate with real money.
However, there is a practice technique that should implemented right from the beginning to prepare for accommodating liquidity.
The following is a sample routine solid routine and prudent habits to help become consistent and improve accuracy while paper trading.
- Prepare watch list
- Devise trading strategies
- Monitoring watch list and market correlations
- Scan for set-ups
- Plan entry, stop and target pre-trade
- Trade execution and management
- Administer proper pacing throughout trading day
- Review trade(s)
Practice Being a Liquidity Provider
In order to get more realistic fills, practice placing bids for entries, rather than buying on the ask. Practice selling on the ask, when exiting long positions. If you are able to consistently provide liquidity, then it shows that you are becoming well prepared to deal with liquidity. More importantly, you become better adjusted to fills and improve your temperance to volatility.
Buying on the bid and selling on the ask takes preparation, foresight and timing. It also earns ECN pass-through rebates since you are providing liquidity when trading real money.
The most important benefit is that it helps to keep you from panicking or chasing entries and exits and improves you accuracy. This is the most important psychological roadblock to overcome when trading real cash.
Instilling the habit of buying on the bid and selling on the ask will get your mindset in the right stance to deal with liquidity a market maker.
Benefits of Paper Trading
Paper trading allows one to test out their strategies and build up a foundation of trading skill sets, without risking any capital. Paper trading also helps a trader to adapt to trading new stocks that may have a much different trading rhythm and behavior than other stocks.
For example, Tesla Motors (NASDAQ: TSLA) trading at $220 moves at a much quicker pace with a larger price range than EBAY (NASDAQ: EBAY) trading at $24. A new trader jumping into TSLA after trading EBAY is in for a rude awakening when the bids can evaporate – $0.70 in seconds, while the trader is used to an EBAY rhythm where a – $0.10 downtick is considered large.
It also allows you to discover what style of trading best suits your temperament: intra-day scalper, intra-day swing trader, news traders, momentum trader, and or overnight/multi-day swing trader. Lastly, it helps to find holes or gaps on your trading system/methodology so that it can be calibrated and tweaked.
Paper trading helps to acclimate the trader so that capital is not lost during the discovery process, which then allows you to actually follow the stock and not the profit/loss blotter.
Some of the Differences Between Paper Trading and Real Trading
Downsides of Paper Trading
The biggest problem with paper trading is the unrealistic results. The order fills are usually too good and not realistic. Most simulators will apply the order fill the inside bid and offer, but that can be a bit optimistic.
Understand that paper trading is used to practice and fortify your skill sets and methods before trading real money.
You should never assume the paper money made during this period would equate to the same amount of profits with real money.
Transitioning from Paper to Cash Trading
Although paper trading eliminates the emotional baggage and pressure that comes with trading real money and having skin in the game, the reality is that you will experience all the emotions and pressure once you start trading real money.
The tension can be overwhelming to many traders and the results can be completely different between paper and cash trading. The issues of routing and liquidity can result in a lot of slippage when trading real money.
The pressure of reacting quickly and walking the fine lines between conviction and stubbornness can be tantamount to being thrown in a lion cage with a piece of meat wrapped around you neck. The key is to build a comfort level with paper trading so that you can transition slowly into trading a real money account.
This transition process is often where new traders screw up and get blindsided. Trading very light size during the transition and try to repeat the good habits that should have been instilled on the simulator. Repetition is the key.
What is paper trading? Advantages & Disadvantages
Paper trading is more commonly used in an institutional setting. It is what we in the Forex trading or CFD industry call Demo Trading.
The term ‘paper trading’ comes from the stock market, where investors who wanted to practise would write their investment ideas on paper and follow the market movements, to see if their ideas panned out.
There are many types of traders, including more short-term and those who keep positions open for the longer term. Common to all new traders is hesitation when it comes to placing trades and of course, concern at losing money from their trading.
Whilst all types of trading come with risks, brokers offer a variety of tools to help first time traders to improve their trading skills before committing real funds. One of these tools is called “paper trading”, although as mentioned you are less ly to hear the term, since we use the term Demo trading.
Click here to open a demo account and master your trading skills! Ready for the real action?
- Trading without the riskDemo accounts come with many benefits and are widely used by first time traders who want to practice and learn how to trade before they trade with real money. More experienced traders use demo accounts to test out their strategies or to test-drive a new platform they haven’t used before. For new traders it is an excellent way to learn about the market, and most importantly to learn about yourself as a trader. Needless to say, this is a very useful tool in the trading world.On the downside though, for a new trader, trading in a simulated environment without committing real funds, feels very different from a real account scenario where real money is at stake. With demo trading, the psychological aspects of trading don’t come into play, fear and greed.
- How it WorksUsing a demo account allows first time traders to experience and trade with an account that looks and acts similarly to the real online trading accounts traders use. Demo account users receive an amount of virtual money in the beginning, and can start trading by opening selling and buying positions. Just a real account, the demo account shows market movements on the traders’ screens, so they can decide if they should continue their trade or get out. This all contributes to assessing their actions, learning from them and getting ready to start trading in their real account.For demo account users it is not only important to practise on demo accounts, but also to look back at their actions and learn from them. This is also important for more experienced traders, who want to practise on the demo account. They need to check if their trades and strategies proved to be as successful as they had hoped, and of course, they will use this knowledge to optimise their performance on the back of it.
Disadvantages of paper trading
However, there are some risks to paper trading which should not be ignored. Some people would suggest not to begin with a demo account for a number of reasons.
- Euphoria TradingThe main one, according to them, is the sense of euphoria paper trading can give. Since there is no real money being used, traders can take risks that they otherwise wouldn’t, thus expanding their profits. A case of money loss, on the other hand, is often not taken very seriously since it’s not real money that’s being lost. There is another disadvantage; since it’s not their money they are trading with, they won’t always follow the market and respond as they would if it was their own money.
- Delayed DataSome demo accounts do not use up-to-date information, but delay it by 15-20 minutes, so competitors do not use the data. Others display fake data, but the main goal remains the same – to get traders ready for the Forex market. On the AvaTrade demo account, the information displayed is in real-time and projects the accurate rates. The tool is very common and used worldwide by brokers on stocks, bonds, commodities etc. Due to the fact that there is not real money that’s been put in, it’s often called “Paper money”, “Monopoly money” etc.
Should you use paper trading?
Should you as a first-time trader use paper trading? Should you open a demo account before trading in the real market?
The answer is yes, as long as you remember how to use it to its best effect. A few simple guidelines can dramatically increase the effectiveness of a demo account.
Here are a few simple guidelines that would dramatically increase the effectiveness of a demo account.
- Treat it as a proper real accountThis will not only overcome the main obstacle of demo accounts, but will ease the transition from demo account to real accounts. Paper trading might seem easy, but there is an important component missing.As mentioned briefly earlier, real trading involves a lot of emotions, which can be a plus since traders are more invested emotionally. But this can lead to negative consequences – emotional trading, with no real thought or research and ending with money loss. Again, with demo trading you may feel the adrenaline rush and the fear or the greed. So as long as you factor this in, the transition from demo to real will be more successful for you.
- Learn as much as possibleIt is highly recommended to practise on a demo account, whilst simultaneously educating yourself on the market. There are so many free blogs and education portals you can use. Don’t underestimate the importance of a strong understanding of the trading platform and the markets you wish to trade on. Preparation is key. We recommend using the demo account for at least a few days, before switching over.Finally, remember that trading does not suit everyone. Those people that rush to trade without considering the intricacies of the platform or the market may end up disappointed, not to mention ending up with lighter pockets.Use paper trading as a mirror to yourself, in order to answer the following questions – am I ready to trade? Is this market suitable for me? If the answers are yes, it is time to open a real account!
Paper Trading main FAQs
- Why is paper trading important?Paper trading gives you something approaching hands-on experience, which is far more valuable than simply theoretical knowledge. You can be a genius with theoretical knowledge, but when faced with the pace of movement in real market trading environments you could freeze-up and fail miserably. So, paper trading can teach you valuable lessons about real-world trading that you can’t learn from other sources. And while paper trading won’t fill in all your learning needs it is one zero-risk method for improving on your trading.
- Who can benefit from paper trading?Paper trading is considered to be very useful for new traders, but in truth it can benefit anyone, even professionals use paper trading when they are developing a new strategy. And while you might be impatient to get to trading with real money, the benefits to be gained from paper trading are incalculable. Taking the time to test your trading strategy with paper trading could mean the difference between a profitable trading career, and a huge disappointment. Paper trading can also help remove the emotions from your trading since you aren’t risking real money.
- How can you get the most from paper trading?Paper trading without a plan isn’t going to help you much in the long-run. You have to treat your paper trading just as carefully as you would handle real money trading. That means instead of starting with the $1 million demo account you’ll ly be faced with, you should start with a realistic amount of money in your demo account. That might be $10,000 or it might be $1,000. Then you need to record everything about your trades. Why you took the trade. What your exit target is and why. What actually happened with the trade. Afterwards you can go back to determine how you might have made the trade more profitable, or less of a loss.
Paper trading account
So now it’s time for you to open a paper trading account. Start testing out the different trading strategies and techniques we talk about in our education section.
You can start by identifying trends and then using simple moving averages, before moving up.
Try and spot your own emotional reactions to different trade outcomes, as understanding how this affects your trades will be a massive advantage in improving your skill level prior to risking real money.
Click here to open a demo account now!
We recommend you to visit our trading for beginners section for more articles on how to trade Forex and CFDs.
Other recommended guides:
- How to trade gold online
- How to trade bitcoin
- How to Trade Cryptocurrency
Best Paper Trading Platforms
Paper trading offers a risk-free way for beginners to learn to trade or for advanced traders to try out new strategies. However, in order to paper trading to be effective, it’s essential to have a paper trading platform that mimics the dynamics of live trading accounts.
With that in mind, let’s take a closer look at what to consider when choosing the best paper trading platform. We’ll also highlight three of our favorite paper trading services to help you get started.
What is Paper Trading?
Paper trading, or simulated trading, allows investors to place trades in a simulator account so that there is no actual risk or money changing hands.
The name “paper trading” comes from the old practice of recording trades by hand to determine their profit or loss.
Today, most paper trading platforms work just a live brokerage account and automatically track your simulated portfolio for you.
Why Use a Paper Trading Platform?
Paper trading has several purposes. Simulators are highly popular among beginning traders because it allows them to learn the basics of placing orders and planning out strategy in a risk-free environment. The only downside, in this case, is that traders need to have the same mindset of risk tolerance in the simulator that they would bring to a live trading account.
Experiences traders can also make use of paper trading platforms. In particular, simulated trading is a great way to test out and refine a new trading strategy. Alternatively, paper trading can be used to practice with profiting under different market conditions or to safely try out options trading.
What to Look for in a Paper Trading Platform?
To be effective, paper trading should be as similar to live trading as possible. For that reason, the main things to look for in the best paper trading platform are the same advanced features that many of the best charting and brokerage services offer.
The first thing you need a paper trading platform is order flexibility. You can place limit, stop-loss, and other conditional orders with a live trading account, so you should be able to place them in your simulator as well. On top of that, some of the best paper trading platforms allow you to automate orders technical patterns and custom-defined triggers.
Importantly, not all simulators give you access to place simulated trades across the entire market.
If you’re interested in simulating trades for stocks outside of the major exchanges, you’ll need to do some research to find simulators that support those tickers.
In addition, if you want to use a simulator to practice options trading or test out an options strategy, make sure you have access to place paper options trades.
Paper trading used to require that you track your returns and performance by hand, but most modern simulators give you access to the same portfolio tracking tools as live brokerage accounts.
Some paper trading platforms go even further, allowing you to break down your trades to see where you succeeded and where you may have made more questionable decisions.
Look for these reporting tools, particularly if you are trying out a new trading strategy.
What really distinguishes paper trading platforms is the suite of tools they each put at your disposal. There’s a lot to look for here.
To start, consider whether your simulator offers mechanisms for discovering potential stocks and trading opportunities. Is there a stock news feed, a watchlist function, or an advanced stock scanner? While you can turn to outside tools for these purposes, it’s definitely advantageous to have them wrapped into your paper trading platform.
Also, look for technical charting tools or fundamental analysis tools that are specific to your chosen trading strategy. If you’re using a simulator to try out a new trading strategy, having the option to define an automated execution (for example, via a coding language) is extremely helpful.
There are a ton of free paper trading platforms available. However, many of the more advanced services require you to pay for real-time data, if not for the simulator itself. Data costs vary depending on what market information you need, but live trading data typically start around $100 per month.
Note that some free services do require you to sign up for an account with a brokerage, and potentially even to fund an account. This is okay if you plan to move into live trading in the near future and would stick with that brokerage. Otherwise, you may want to look elsewhere for a trading simulator.
Our 3 Favorite Paper Trading Platforms
With all that in mind, let’s take a look at three paper trading platforms that we think have a lot to offer beginners and experts a.
TD Ameritrade offers paperMoney, a paper trading service that offers simulation within the popular ThinkorSwim trading platform. You do need to register for a TD Ameritrade account to use this service, but you don’t have to fund the account or pay any data fees.
ThinkorSwim is a highly capable technical trading platform. It offers a custom coding language, which makes it perfect for establishing custom scans and defining trading strategies technical charting patterns. In addition, ThinkorSwim allows you to set up trading alerts technical patterns for any stocks in a scan result list or a watchlist.
Almost all of ThinkorSwim’s features are enabled in simulator mode, and you can track your portfolio through paperMoney. However, it is not built as a simulator from the ground-up, so there is little in the way of reporting on how your trades performed other than return tracking.
Active Trader screen with Heiken Ashi and Market Depth
DASTrader is another advanced charting and live trading platform with a built-in simulator option. This simulator is best for advanced traders who want to practice with direct market access.
DASTrader’s paper trading allows you to rout orders through more than 50 different market makers and offers the option to purchase Level 2 market data.
Plus, it offers multiple types of stop orders, options chain data from OPRA, and multi-account management features.
However, DASTrader falls short when it comes to technical charting features. It lacks many of the technical indicators and drawing tools found in ThinkorSwim, and doesn’t have a custom coding language to use for defining automated strategy execution or advanced scans.
DASTrader doesn’t require a brokerage account, but you do have to pay for exchange data on a monthly basis. NASDAQ Basic with Level 1 data starts at $100 per month, and Level 2 data starts at $150 per month.
TradingSim is a designed paper trading platform and offers a number of tools for simulation. To start, you can replay any trading session from the past three years and fast forward through time as you wish. In addition, the profit and loss reporting is much more detailed than what you’ll find in most advanced charting platforms with paper trading modes.
Another useful tool that TradingSim offers is risk management. Within the simulator, you can specify parameters for maximum account drawdown before your trading session resets. This is helpful for developing discipline that can be transferred to live trading, when risk management is essential to long-term profitability.
TradingSim offers simulators for either stocks and ETFs or futures. The stocks simulator includes data for 11,000 stocks and more than 1,000 ETFs, while the futures simulator includes data for the 20 most commonly traded contracts. Each simulator costs $24.75 per month on its own, or you can purchase stock and future data together for $35.75 per month.
Paper trading platforms allow beginner traders to learn the ropes of trading safely as well as enable advanced traders to try out new strategies.
While there are many free simulators, the best paper trading platforms typically require you to pay for data or to open a brokerage account.
Ultimately, it’s essential to look for a simulator that offers the specific tools you need to improve your trading strategy, as different paper trading platforms have different strengths and weaknesses.
Investing Strategies That Work!
What you will learn in this post:
- The complete step-by-step guide to paper trading
- Why it’s important to practice before moving to the “real stuff”
- How to sign up for a $200,000 demo account from TD Ameritrade (thinkorswim)
- How to add $1,000,000 or more to your trading account
- Best ways to ‘practice’ trading stocks before making actual investments If this is what you’re looking for in one comprehensive article, read on.
As an up and coming investor, have you ever wondered how to set up a paper trading account?
Have you had questions swimming around your head so as to why it’s a good idea to set up a paper trading account before seriously getting into investments?
The very reason I put this piece together is to help you, the novice investor, get a little practice before making major, life-changing investment decisions.
I gambled a good deal of my money away and learned the consequences the hard way.
Hopefully, you won’t find yourself in the same predicament.
This article is aimed at showing you clear and simple steps when setting up a paper trading account and why it really pays to do so.
What is Paper Trading & Paper Money?
To effectively make use of paper trading practices, we’re going to make use of paper money or “fake” money, if you will.
Paper trading is basically the notion of trading with fake or pretend money to see what outcome your investment decisions might lead to.
Paper trading is very useful for a number of reasons.
When you plan to invest any given sum of money, you’d want to see the effect it has before you actually take the plunge with real money.
The benefit lies in the practice of making real trades without real money, because frankly speaking, newbie stock trading can be a scary thing.
Trust me, I’ve been there and don’t want you to be in the same position.
Why Should You Practice Stock Trading?
Before proceeding any further, I just want to quickly share with you how things went from bad to worse for me, simply because I failed to take paper trading seriously.
I started out back in 2011. I was a young and hungry investor at the time, completely new to stock investments.
I had witnessed a lot of my friends and acquaintances taking huge gambles and making thousands almost overnight.
I wanted in – I wanted a taste of that money.
However, unbeknownst to me at the time was my sheer lack of knowledge and experience. I started making blind trades without any real strategy.
I was just hungry for seeing investments returns and things, unfortunately, took a turn for the worse; I made the fatal mistake of trading with actual money, rather than practicing with paper stock trading as I should have.
Before I knew it, I was buying and selling stocks with reckless intent.
Eventually, I lost pretty much every cent I had and that was a harrowing experience which I don’t have the words to describe.
I decided it was the stock market’s fault and not the reckless decision-making.
Finally, I stopped playing the blame game and realized that it wasn’t the stock market that was stacked against me. It was me. “I” was the problem.
After all, I didn’t take the time to learn and practice investments through paper trading – I just wanted to be a part of the “get rich quick” business my friends.
I had very little know-how on how the stock market actually worked.
Well, I finally mustered up the courage to acknowledge my failures and started thinking more along the lines of an investor rather than a gambler.
I perfected my investment strategies and made my money work for me.
I just want you to know that I’m somewhat proud of the money that I’ve made as a result of real investment education and not gambling.
And I want you to take away from this experience so that you can benefit the same way I did:
- Through paper trading, you will never have to risk losing hard-earned cash just to test out various stock trading strategies.
- You get to practice as much as you want without taking any real-world risks whatsoever – I just wanted to reiterate that a bit more in case you missed it!
- It’s very easy to create a paper trading account, starting a $10,000 balance, $200,000 or even $10 million. I’m going to show you exactly how to do that.
How to Set Up a Paper Trading Account
Only the smartest investors incorporate certain strategies to make sure no stone is left unturned, before venturing out into the real investment world.
If you’re looking to stay ahead of the stock market curve using highly innovative tools to arm yourself with the right investment strategies, there really is no better way to do that than Thinkorswim PaperMoney.
The art of smart investments lies within educating yourself and while you’re at it, why not do it in a fun and interactive way?
Thinkorswim ® is an advanced virtual trading platform by TD Ameritrade that offers a holistic trading experience to keep you on top of your virtual investments.
I’ve personally been using Thinkorswim ® for years to stay well ahead of the curve and tell me tell you this isn’t just your everyday run-of-the-mill trading platform.
You’re getting innovative technology and cutting-edge features right at your fingertips.
You can empower yourself to analyze, devise strategies and trade never before.
How to Get a Free Thinkorswim Paper Trading Account with a $200,000 balance
Signing up for an account on Thinkorswim® is quite simple. You can follow 7 steps below to get your free account:
Step 1: Visit the Thinkorswim website and simply click «register here for paperMoney»
Here's the link: https://www.thinkorswim.com/t/pm-registration.html
Step 2: Register for a paper trading account
If you've already opened a real trading account from TD Ameritrade, you don't need to register a demo trading account.
You can use your existing account to login to the Thinkorswim® trading platform.
If you haven't created an account yet, simply click «No» to fill out a few on-screen details before choosing a user ID and password.
Step 3: Fill in your information
Now it’s time to fill in your information and choose your login username and password:
Sometimes, what happens is TD Ameritrade may not let you create a demo trading account because you may be registering from a “restricted country or region”.
If this is the case, you can go ahead and use fake or made up information.
Since this is just a demo trading account, using fake information does not violate any terms or conditions. After all, you’re only creating an account to practice so it isn’t a big deal.
You can also go to FakeNameGenerator.com, select your country as “United States” and click generate:
This site will create fake personal information for you. You can use this information to sign up for a demo trading account.
You should use this site for personal purposes though make sure you read their terms of service carefully:
Simply use the generated information to sign up for a demo trading account using the step above and you’re good to go.
Step 4: Review your information and create an account
It’s now time to review all the information you entered on the Thinkorswim® registration page:
Step 5: Download the thinkorswim trading platform
After clicking on the “Register” button you need to download the Thinkorswim® trading platform:
The trading software is available on Windows, Mac, and Linux. Simply download and install the applicable version:
Step 6: Activate your paper trade account
The next step is to activate your account. TD Ameritrade will send you a confirmation email; click on the link and then log in to your account to activate it:
All set! Now you are good to go.
Step 7: Install the trading software and enjoy your free trading account
After installing the software, simply log in to the Thinkorswim® trading platform with your registered account.
Make sure you select «Paper Money”:
After logging in successfully, you will see this screen – this is what's inside the trading platform:
You'll instantly have $200,000 “paper money” to practice trading stocks with, options and ETFs, as well as $10,000 for Forex trading.
Use this account to practice until you get familiar with the stock market. Once you gain enough skills and knowledge, you can start trading with a real account.
How to Add $1,000,000 to Your TD Ameritrade Paper Money Account
If you want to add more cash to your demo trading account, here’s how you do it.
First of all, you'll need to buy a random stock. So let’s say, I buy 100 shares of Apple, as follows:
(right click and open the image in new tab to view a bigger image)
Next, you need to “Adjust Cash”. Go back to the Monitor Tab and you'll see the 100 shares we've just bought.
Right click and select «Adjust Cash» as follows:
(right click and open the image in new tab to view a bigger image)
Now you can add $1,000,000 or more to your paper trading account:
We now have over $1,000,000 to practice paper trading:
How To Use Thinkorswim to Practice Trading Stocks
Even though you might want to add a million dollars to your paper trading account, I would not recommend that because:
- It's better to practice with small accounts.
- When you trade with a lot of money, it's difficult to manage your profits and losses.
- You will not have a sense of what's going on with the market and you will not care much if you are losing your money (believe me, I’ve been there).
- Our main purpose of using paper money is to do real world investing with «free» money, which we shouldn’t lose sight of.
To make paper trading more realistic:
- You should start with a small account.
- Adjust the cash balance your actual financial capacity; for example, you plan to start investing with $10,000, so make sure you will use a $10,000 account to practice with.
- Try to grow that money — if you can turn $10,000 into $20k or even $100k, you are good to start trading with a real account.
- Practice until you can make a profit, until you understand exactly what you're doing, and until you are confident about the investment decision you made.
- The above should give you a fairly good idea so as to starting small and very gradually building up.
To adjust the cash balance, you can also follow the guide above.
In addition, I’d strongly recommend that rather than adding money to your $200,000 account, you should subtract the cash balance by $190,000, so:
And once you do:
The Bottom Line
As we’ve just seen, practice makes perfect.
Even though you can really invest huge amounts of money and take big risks just to get a taste of how things work in the real stock market, I really would reiterate the importance of starting small, in order to get a gist of how things work.
As long as you consistently practice, I promise that you’ll master the art of making sound real-life investment decisions through paper trading.
The more you practice, the more you learn. Continue learning, and the more you’ll earn!
You no longer need to sift through web page after web page trying to understand how to set up a paper trading account.
All you need to know is right here in this guide. Congratulations, your investment journey has now begun! Good luck and keep at it.
Now you have it — a detailed guide on how to practice trading stocks with paper money.
Leave a comment below and let me know what your trading goal is and how much paper money you will start practicing with.