While stock trading might be a volatile venture, paper trading offers potential and new stock traders a chance to prepare themselves for live trading without risking a dime.
In paper trading, individuals can buy and sell securities without risking real money.
If you want to learn stock trading, a paper trading account is a necessity for honing your skills.
In this article, we’ll be listing the best trading platforms for you. Stay with me!
Take a quick look at the table of contents below.
- What Is Paper Trading?
- Why Should I Trade Paper?
- How Do I Start Paper Trading?
- How Long Should I Paper Trade?
- What Are The Best Paper Trading Platforms?
- #1 TD Ameritrade
- #2 TradingView
- #3 Webull
- #4 E-Trade
- #5 TradeStation
- #6 Interactive Brokers TWS Paper Trader
- Final Thoughts
- We Also Recommend
Before we go on to list the best trading simulator options, let’s define paper trading.
What Is Paper Trading?
Paper trading, also called virtual trading involves practicing placing buy and sell trades without risking a cent. This is an opportunity for new traders to master the act of trading stocks and master a stock trading strategy before investing their money in a brokerage account.
It can further be said to be a method of virtually testing out setups and strategies without risking real cash. This is a great way to develop skills and gain confidence before you switch to live to trade.
Paper-trading platforms gives you the feel of a real trading platforms with the well built demo and design.
Why Should I Trade Paper?
Just as it sounds, paper trading is a demo session that sharpens your armor for the times ahead.
You might want to ask why should I spend my time on paper trading when I’m not actually making money from it. Not to sound inimical, anyone that eludes a preparatory ground is preparing for a nosedive.
Let’s take a look at the reasons why you should paper trade:
#1 Get used to the pattern
Paper trading offers you time and chance to get familiar to the style.
For new traders, the idea of choosing stocks and executing real trades can be overwhelming. To this end, there’s a need to stay prepared.
You might also wonder if you can’t get enough knowledge from watching videos and lessons. Well-well, you might get peripheral knowledge but on-site practical knowledge is next to nothing — it exposes you to the workings of the market.
Once you get familiar with the workings of the market, how to research and trade stock patterns and understand how to execute trades well, you’re good to go.
Paper trading gives you an opportunity to put what you’ve learned to work. You get to apply your knowledge using practical trading scenarios.
#2 Save Your Money
By learning how it works without having to spend money, paper trading helps you save money.
Furthermore, getting the required knowledge before starting live trading will help avert early huge losses. Therefore, it’s always advised you learn the process and gain experience before scaling up.
#3 Try New Strategies
You have to find your own special way of choosing stocks and executing trades.
Carrying out demo trading can help you figure out the strategies that work. It helps you creates a unique sense of choosing stocks and executing trades.
This system doesn’t restrict you to one strategy, you can try out a whole lot of strategies that can be constantly sharpened based on the current market trend.
How Do I Start Paper Trading?
Paper trading is made much easier today than ever before. Here’s what you need to know to get started.
Setting Up a Paper Trading Account
To start paper trading, you need to set up a paper trading account. There are a good number of platforms that offer paper trading options. Setting up an account might require you to input some basic information.
Financial simulators copy the real market. You get fake cash to practice buying and selling stocks and options. These simulators are based on real market actions. Some simulators are in real-time and others have a time delay.
You’re probably familiar with fantasy sports where you pick and trade players. This is an example of a fantasy simulator. It’s not real and they typically charge users to use them.
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How Long Should I Paper Trade?
There’s no specific amount of time for paper trading. Nevertheless, it is always advised that once you’ve garnered a reasonable knowledge depth and you feel comfortable as a paper trader, you might have to call it a stop and move on to the real trading.
Though your knowledge in buying stocks will always save the day in live trading, be aware that it might not be all bliss at first. Therefore, take it slow and start with slow positions.
Let’s get to know about the best paper trading platforms.
What Are The Best Paper Trading Platforms?
There are only a few paper trading platforms. Some are integrated with a brokerage account as a way to test platforms while others are only developed for charting tools.
So, if you’re new to trading or you want to sharpen your trading skills, here are the best simulated stock trading platforms to pick from:
#1 TD Ameritrade
TD Ameritrade is a big financial firm that offers a variety of services. Its Thinkorswim trading platform features tools and resources you can access from your desktop or mobile device.
If you have a TD Ameritrade account, you’ll gain access to two different paper trading accounts. One is a standard margin account, the other is an IRA; both come fully funded with $100,000 each.
Thinkorswim also has Options Statistics, specialized tools for traders to find entry and exit points on options trades.
With over 400 technical indicators and access to the CBOE’s TradeWise options newsletter, Thinkorswim gives paper traders more than any other platform.
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TradingView is a charting and analysis platform. It has several pricing tiers based on your needs. TradingView describes itself as “easy and intuitive for beginners, and powerful enough for advanced chartists.”
This paper trading platform includes real-time data and charting software, and it doesn’t require any software installation.
On TradingView, there is a paper trading module, so you can learn before you risk real money.
Webull is a discount broker with zero commissions and zero deposit minimums. It also offers a free paper trading simulator that gifts you $1 million virtual cash for a start.
From there you can buy or sell stocks in the simulated account that looks and feels just like what you would expect from a real brokerage account.
E-Trade doesn’t really offer a free demo paper trading account. But you can paper trade on E-Trade once you set up an account. You can switch between your cash account and paper trading account at any time.
Also, E-Trade shows you the impact of your trades on your account before you execute them, which is great if you’re a DIY investor.
TradeStation is one of the best paper trading platforms that are available for clients.
With TradeStation’s new TS GO account option, new traders will have access to professional-grade stock screeners and comprehensive educational and development tools to help them advance as investors.
This platform offers you the opportunity to gain real-time, no-cost trading experience and also see the power of fully automated trading.
#6 Interactive Brokers TWS Paper Trader
Interactive Brokers has a great platform in Trader WorkStation that is capable of analyzing all kinds of markets with hundreds of technical tools. Nevertheless, Interactive Brokers offers a paper trading account with nearly all the features of the live platform.
With $1,000,000 in fake cash, you play around with different things, especially the options trading tools.
The Options Portfolio algorithm automatically adjusts your account to the Greek risk dimensions (delta, theta, vega, or gamma) while factoring in commissions and decay.
In the Options Strategy Lab, you’ll be able to enter your own elaborate option orders and compare up to 5 different strategies at once. You can also filter by characteristics like strike price or expiration and enter orders based on your experiments.
For first time investors, taking as much paper trading as you can always be to your advantage. The real simulations will help you prepare for live trading.
While you’re paper trading try as much as you can to explore different strategies and new ideas so you can get comfier in the venture.
Once you feel you’ve gotten conversant with trading styles and techniques, try trading with a stock that has a lower price and consistent response to market factors. If you start trading with a highly volatile stock, it may be a challenge. But if you start from a slow position, you can practice what you’ve learned without taking on too much risk.