Online stock brokers offering best practice accounts: virtual trading (simulated, paper trading) environment

Broker Paper Trading

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 (paper) trading in a single article. Below we'll talk about the two best brokers - OptionsHouse and TD Ameritrade.

OptionsHouse Virtual Trading

A sophisticated web-based trading platform is available to OptionsHouse clients without any frequent trader requirement. A nice feature of this platform is the ability to switch from the regular brokerage account to simulated trading. In this mode, investors can practice trading in the same platform without putting real money on the line.

The platform has many important features, such as charting, option research, market news, order entry, and strategy testing. The Java-based platform is user friendly and easy to learn. At the top of the platform screen is the account number. Clicking on the account number produces a drop-down menu where the user can switch to a practice account with $100,000 of fake money.

Optionshouse paper trading

All of the same platform features in the real account are also available in the paper-trading account. This means that investors can practice day trading or the use of margin. The simulated platform can also be reset to $100,000 at any time. Paper-trading capability is a permanent feature of the platform, so OptionsHouse customers can always practice trading.

Optionshouse paper trading

Conveniently, the broker also offers paper trading on its mobile app. After logging in, users can select paper trading. Clicking on the account number produces a menu where the simulated platform can be selected. All the regular app features are still available in the simulated version. Users can practice trading stocks, options, mutual funds, and ETF's with $100,000 of virtual money. Also available in the mobile platform is the use of margin and day-trading capability, two areas where traders often need some practice.

Optionshouse virtual trading

Opening account with OptionsHouse is free and takes about 10 minutes. 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 generous sign up incentive: None

TD Ameritrade Virtual 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.

Best free paper trading simulator

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.

Best paper trading site

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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.

Broker offering free trading simulators

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.

TD Ameritrade virtual trading

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.

Best Paper Trading Brokers Comparison

The primary advantage that paper trading on the thinkorswim platform has over OptionsHouse is that thinkorswim has forex trading, whereas OH does not. Many investors have little to no experience with forex and futures, so a practice account for those products is a major advantage. Due to the volatility and leverage of such products, investors should definitely practice trading futures and forex before committing real money. The vast majority of brokers don't have practice accounts for forex and futures, so TD Ameritrade has a unique advantage in this category.

The OptionsHouse platform is more simple and streamlined than thinkorswim. New investors who have little or no experience trading any products would probably do better on the OH platform. Thinkorswim has more features and is therefore more complicated and difficult to navigate.

One disadvantage of the thinkorswim desktop application is that users cannot switch between the standard trading system and paper-trading. With the mobile app, users can switch between the two trading accounts without having to log out and log back in. OptionsHouse's web-based trading platform and mobile app both have the ability to switch between accounts without logging out.

The thinkorswim mobile app has CNBC live steaming, chat rooms for education on the platform and discussions with other customers, and several ways to contact customers service. The OH mobile app unfortunately has none of these features. Novice traders would benefit from these features on the thinkorswim mobile platform.

Summary

While most brokers don't offer paper trading capability, both OptionsHouse and TD Ameritrade do. New investors learning the ropes would be wise to take advantage of either broker's simulated trading services.

New Account Offers

TD Ameritrade/Thinkorswim: Trade free for 60 days + get up to $600.

Optionshouse: None

Updated on 2/1/2017.

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