Stock Trading Simulators Review

Why Use Stock Trading Simulators?

Investing in the stock market can be as scary as it is exciting, especially for amateur investors. There's a lot more to consider than "Buy low, sell high." Even experienced investors take risks when trying out a new strategy. When you aren't involved full time in Wall Street, it can be hard to gauge trends and identify the rising stars.

Stock trading simulators allow you to explore the market without risking your life's savings. With stock trading simulators, you pick your securities, make trades and track your results without investing actual dollars. Some programs use past data to run possible trends, while others track a stock's performance in real time. Some simulators provide tutorials to help you learn the art and science of trading, while others simply provide a tool for testing your skills. Some, like Wall Street Survivor, sponsor contests where you can pit your skills against other traders and win real money.

Many stock trading companies, like Scottrade, have a simulator function as part of their regular program, while Options Industry Council's simulator, OIC, is used by SeibertNet as a complimentary training tool for its clients.

Stock trading simulators vary in the amount of virtual cash they allow you to "invest." On average, we found simulators allow you a virtual budget of $100,000. Some, though, let you determine what you think you can spend and let you add to that amount or reset the simulator to start again as needed.

You can learn more about online stocks and simulations with these helpful articles.

Should You Use a Broker-Sponsored Stock Simulator?

Several online stock traders, such as Charles Schwab, OptionsHouse or TD Ameritrade, include simulators as part of their trading platform. This allows you to use their software to try out theories and new strategies. It can also help familiarize you with the company's platform if you just started using the brokerage or if you want to explore the software more thoroughly before committing actual money. If you're already familiar with the brokerage's software, the simulation feature lets you explore new tactics or test a new stock risk-free on a platform you understand. If you understand the controls and the reports, you can judge the results of your experiments more accurately.

On the other hand, most brokers have a subscription or minimum investment requirement in order to use their programs. If you are not ready to begin investing or are interested in using this software as an academic or learning experience only, you probably want to avoid broker-sponsored simulators.

Stock Trading Simulators Software: What to Look For

The goal of stock trading simulators is to learn. It's a safe place to make mistakes, try new things, tweak your systems and get a good feel for how the market works. As such, you want a platform that is easy to learn so you can concentrate on following trends. You also want a platform that gives you reports that don't just provide the numbers but help you determine the why behind the what. Finally, you want to find companies interested in helping you learn the ins and outs of the market itself without trying to sell you on their service or method.

Here are some other items to pay attention to as you seek out stock trading simulators:

Software Features
Interface is an important consideration, especially for the beginner trader. The last thing you want is to have to figure out the software while you are trying to understand the market. While there is a learning curve with any new program, look for ones with a user-friendly interface, tutorials and help buttons in the program itself. If you already know you want to invest, you may want to look at simulators offered by actual companies so that you grow accustomed to the ins and outs of the software as you learn the market.

After interface, look for tools that allow the software to grow with your experience. Are you interested in forex trading as well as domestic stocks? Options trading? Would competitions motivate you? Do you want real-time hours that simulate the actual market, or do you prefer 24-hour trading?

Look for report and charting features that track progress in real time in a variety of ways. Line graphs, bar graphs and candlestick charts are the most common types of reports, with red and green to show growth or loss. The best reports should also reflect actual stock reports along with helpful links or notes to explain what you are looking for.

Teaching Materials
If you plan to use stock market simulation software to learn the market, find applications that offer additional teaching materials. For example, some, like Wall Street Survivor, offer full courses, while others provide articles or newsletters on the state of the market. Investopedia, one of the go-to websites for learning the market, has its own simulator.

Some programs don't just provide general tutorials. They offer suggestions for trading based on current trends. If you are just starting out, these resources can help you understand the market; if you are testing a new strategy, you may want to ignore these or check your plans against their recommendations.

The stock market is not just a pool of money   it's a wild ocean, buffeted by the storms of public opinion as well as local and international economics. While it seems chaotic at first, a skilled trader can find the currents and ride the waves to profit. Stock trading simulators can help you learn to navigate the waters.