Practice Stock Trading

Have you ever practiced stock trading before?  Maybe you've learned a little about it or you've even tried your hand at it once and a while, but because you never did well, you always gave up.

Yes, it's important to learn everything you can about investing and stock trading before you do it.  Obviously, if you don't know where to begin, you can't get started.  That's why it's important to get started by learning.

Once you know what to do and how to start, one of your best options is to practice.  You wouldn't go out onto a busy highway in a city your first time driving without practicing, and you wouldn't try to get a job as an electrician without first practicing the skill, right?  You wouldn't succeed with either of these without the practice, and you probably won't have great success the first time you buy stocks without first practicing stock trading.

As I've mentioned, you first need to learn and study.  As with any skill you need to get a background in it and learn the basics.  You will also need to learn the steps to get started and how to start with some strategies.

As far as trading stocks you need to learn the basics of the stock market, the difference between buy and hold and trading, possibly using trading software, learning how to research stock, etc.  Start with a basic book on stocks such as any of the ones below.  Get a few to get the best grasp possible.

Once you have the basics down and you know where to start, you need to start practice. There are basically two ways to do this, the risky way and the riskless way. Anytime you trade in the real stock market you are practicing the risky way, even when you've been doing it for years, but if you start off that way without any experience, you have nothing to base your current strategies on.

Practice Stock Trading the Riskless Way

A way to practice stock trading without risking any of your own money is to use a stock market simulation game. You are 'investing' in stocks but you aren't using real money. You are using the real stock market, but with 'pretend' money.

You could make your own simulation practice experiment, but it would be very difficult to keep track of, even with the help of a spreadsheet, if you are trading stock on a daily basis. A stock market simulation game such as Wall Street Survivor makes it a lot easier. It's free to sign up and you can even win free prizes, which is a nice little bonus.

How Long should you Practice Investing and Stock Trading?

I can't tell you an exact time that you should stop practicing and start investing. It just needs to be enough to make you feel confident. If you want, you could keep doing both. Maybe you use the practice to take the really risky investments just to see what would happen. You could continue to study the results and learn how to use charts and technical analysis with them.

You shouldn't stick with it too long because you could be giving up on possible earning opportunies. For example, how would you feel if after a couple years of practice you look back and realize you earned an 'imaginary' $1,000,000? Okay, so you'd have to have a lot of money to start with to earn it, but what if after a year you earned 20% on your money? That's 20% you could have earned in real life on real money.

Be careful and smart. Practice stock trading but don't let it consume you. The best practice is actual trading, but you should use practice to get through some of the bumps in the road first.