Many of us are a little wary of investing — especially when it comes to stocks. It’s hard to get started when you aren’t sure you’re doing it “right.” The good news is that it’s possible to use paper trading accounts to get the hang of the process before you start risking any of your hard-earned cash.
Virtual trading accounts allow you the chance to practice trading. You can learn what makes a good investment, as well as get the hang of how to use a trading platform. A virtual trading account uses real-time information to help you gauge your success. You can create and test a trading strategy, build a portfolio, and the actual performance is reflected in your results. You don’t lose any money (you also don’t see any gains). When you are comfortable with the process, you can then start using a live account, and apply what you learned on your virtual account.
Which Brokers Offer Paper Trading?
Not all stockbrokers offer paper trading to simulate investing. If you are interested in learning a particular platform, it can help to use a virtual account with a stock broker. Some brokers offer virtual trading tools that can help you get hands-on experience in the market, without losing any money. It gives you a chance to “try before you buy” if the broker is the right fit for you.
TD Ameritrade is a popular online stock broker that features low pricing and no minimum deposit. It also offers a generous selection of commission-free ETFs and educational tools that should make it a hit with new investors.
- Commission-Free ETFs
- Easy-to-Use Interface
- Research and Education
- Short-Term Trading Fees With ETFs
TD Ameritrade, with their thinkorswim platform, offers a virtual trading to get your feet wet. With paperMoney, as the service is called, you get a virtual margin account and a virtual IRA, each funded with $100,000. So no only can you test out your trades in a taxable account, but also tax-deferred with the IRA option.
Ally Invest is Ally Bank's online brokerage firm, and together the services make for a great one-stop banking and investing package that's frankly hard to beat. However, it can take inordinately long for your funds to transfer to your account (up to seven days).
- Competitive Fees
- Comprehensive Platform
- Banking Options
- Managed Portfolio Option
- 24/7 Customer Service
- Fund Transfers Can Be Slow
- No Local Branches
- No Commission-Free ETFs
Ally Invest (formally TradeKing) offers $50,000 of virtual currency to test your trading skills including their FOREX account. Try out their tools to see if Ally Invest is the right service for you. Don’t forget Ally Invest includes Ally Bank as well so you can have your accounts all at one place.
TradeStation may be a bit on the pricey side, but it's a decent trading platform for active traders. It has a great selection of investments, including stocks, bonds, ETFs, funds, foreign securities, options and other instruments.
- Comprehensive Features and Tools
- Selection of Trades
- Low Fees
- No Rollover IRAs
- Weak Mobile App
TradeStation offers their Simulator that allows you to test risk-free before you trade. Gain real-time, no-cost trading experience – and see the power of fully automated trading firsthand. Ultimately you can test new markets and new strategies – without risking a cent.
With Kapitall, test out stock market theories safely while improving your strategy. Its pricing may be high and it might be slightly limited when it comes to investment options, but Kapitall is one of the more fun platforms out there.
- Fun and Easy to Use
- Quick Setup
- No Minimum Balance
- Limited Investment Options
Kapitall started out as a stock trading game allowing you to build a virtual portfolio and track its performance. That option is still there, but now Kapitall is also a brokerage. You can test out a portfolio, and then, when you’re ready, build a real portfolio.
You can also practice by signing up for stock trading games. MarketWatch offers various games that are free or low cost and can help you learn the ropes. Wall Street Survivor is another trading game that allows you to try different tactics. In some circumstances, you can earn prizes and cash.