Broker Paper Trading Accounts
Investing or trading in the 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 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 brokerage companies offering free virtual trading in a single article. Below we'll talk about two best paper trading
accounts on the market right now offered by TradeStation and TD Ameritrade.
TradeStation Free Paper Trading
All TradeStation clients have access to paper trading. The broker does not charge anything for this very convenient service. Because TradeStation offers a variety of investments, including fixed-income, options, and futures, a practice trading account is especially helpful here.
Simulated Trading Within the Browser Window
There are two virtual trading platforms at TradeStation. One is on the firm’s browser-based trading system. To reach it, you simply need to go to TradeStation.com and click on ‘LOG IN’ at the top of the page. A short drop-down menu will appear. One of them is ‘Web Trading – live,’ and the other is ‘Web Trading – Simulated.’ Clicking on the second option produces a login screen that requires a user name and password. You will need to have a TradeStation account to access this paper trading platform.
Once you’re logged in, you’ll have access to all the great features that the regular platform has. These include option chains, hot lists, balance information, orders, and positions. The simulated trading environment starts with a $1,000,000 account balance.
Inside the virtual trading environment, you can easily toggle between a real account and a practice account by clicking on ‘SIM’ in the upper-right corner of the platform and select ‘Live Trading.’ The simulated environment actually displays an account number. It begins with SIM, so it’s easy to know which account you’re working with.
The charting in TradeStation’s browser platform is the most notable of the software’s features. It comes with a variety of technical studies and drawing tools. Limited customization is also available, providing OHLC bars, candlesticks, mountain, and line as graph formats.
The all-important trade bar sits at the top of the browsing window. There are several complex orders that can be practiced. Besides limit, these include order cancels order, and exotics like ‘Entry Short – with exit – stop market only.’
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Paper Trading on the Desktop
Traders who demand even more sophistication can find it on the broker’s desktop platform, which offers both live trading and a practice environment. Like its browser cousin, the desktop platform has two choices at login: live trading and a practice environment. Instead of a login button, TradeStation simply has two buttons, one for the paper-trading account and one for the actual account.
All of the platform’s advanced features are available in the practice environment. These include advanced option search tools and charting that is more complex than the browser-based software. Available order types that can be practiced (and that aren’t on the browser platform) include ‘Entry – OCO Breakout/Fade Buy (Buy Limit/Buy Stop) With no Exit Order.’
Virtual Trading Using the Mobile App
The broker’s mobile app also has a simulated trading account. Like the other two platforms, you simply choose simulated or live when logging in. The mobile platform has all the app’s regular features. These include good charting tools, including technical studies and a drawing program. Watchlists are available along with alerts, positions, and the simulated account’s balance information.
TradeStation Review
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Open Tradestation Account
TD Ameritrade Free Paper Trading
TD Ameritrade's thinkorswim application offers paperMoney, a simulated trading account that allows customers to practice trading on the thinkorswim platform. Thinkorswim
is an advanced system geared towards sophisticated traders, and conveniently has no active trader requirement. It does take some time to learn the platform. In addition
to the usual selection of securities, such as stocks, options, mutual funds and ETF's, investors can also trade forex and futures. Customers who are interested in these
products can practice trading them before committing real money. Advanced order types are also available on the platform, allowing users to practice complex order
strategies before using them in real trades.
Charting tools in thinkorswim are quite advanced. Order entry is possible by right-clicking on the mouse. There are pattern and drawing tools such as ascending triangles and regression lines. Price and time axes can be customized. Users can manipulate various features, such as the aggregation period.
Within the thinkorswim platform there is a "support/chat" button where customer service is available from 6 am to 6 pm CST. Chat rooms are available for customers to communicate with each other, which gives a community feel to the application.
In line with the importance of social media nowadays, thinkorswim lets users share a chart via Facebook, e-mail, Twitter, and MyTrade.
One nice technical feature that TD Ameritrade has implemented in thinkorswim is for the desktop application and mobile app to synch to the most recent symbol viewed.
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TD Ameritrade Review
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Open TD Ameritrade Account
Best Paper Trading Accounts Summary
While most brokers don't offer paper trading capability, both TradeStation and TD Ameritrade do. New investors learning the ropes would be wise to take advantage of
either broker's simulated trading services.
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