Investing or trading in stock market is a skill like any other. Without mastering this skill it’s very hard to be successful in making
money investing or trading equities, options or futures. Learning takes time and practice and you don’t
want to risk you hard-earned money while doing that.
Fortunately, there are a few brokerage firms that offer
their customers a virtual, simulated environment (also called paper trading), where users could trade with "virtual” money, without putting real
money at risk. This is, probably, the best way to learn how to trade stocks, ETFs, mutual funds, options, and futures!
You could test and perfect your trading skills without losing a dime.
We, obviously, can't review all the brokerage companies offering free virtual (or paper) trading, so we'll talk about two of them - OptionsHouse and
OptionsHouse Virtual Trading
With OptionsHouse virtual trading you'll learn to trade or test your strategies — before you invest. Their virtual trading platform is
built and tested by professional traders, and delivers the same professional-level tools, data and functionality as their live platform. With it you can:
- practice your investing skills in a risk-free environment
- test your ideas before committing your money
- instantly see results of your virtual actions based on real-world results
- take advantage of innovative idea generation and risk-management tools, including streaming charts and volatility assessment
Virtual trading is an equally great way for seasoned, veteran traders and for complete beginners to test new strategies.
Opening account with OptionsHouse is free and takes about 10 minutes. After it's done, you are getting a $5,000 of virtual money for simulated investing. If you decide you are
ready to trade with real money, OptionsHouse offers very low $4.95 stock/etf commission and $4.95 + $0.50 per contract rate for options traders.
New customers also get a nice sign up incentive:
Trade free for 90 days when you open and fund a new OptionsHouse account
TD Ameritrade Virtual Trading
Another great paper trading brokerage firm is TD Ameritrade. It offers the best trading platform, called Thinkorswim, with all the bells-and-whistles
professional trader might need. One of the most valued features of Thinkorswim is the PaperMoney account. This option allows users to use a secondary
account to trade virtual money. This is seen as very beneficial because it allows you to see how the client works and to test new ideas and strategies
without needing to risk real money. The downside to a papermoney account is that the orders are executed immediately. This is contrary to the actual
live market where contracts are not always executed immediately and may give investors unrealistic expectations of trading dynamics. Another drawback
is that the papermoney account starts with $100,000. This amount is higher than an average investors account and may give users too much undeserved confidence.
You could open an account at TD Ameritrade Thinkorswim and try it out with $0 down. The company also offers great promotion offer for new clients:
Trade free for 60 days + get up to $600.
This article was updated on 2/25/2015.