5 of the Best Sites for Paper Trading Stocks

One of the oldest financial sayings in the book is that “it takes money to make money.” Besides selling your own work, it’s true, and the stock Exchange is arguably the most lucrative and proven arena for everyday investors to grow their money.

Of course, the surest way to take advantage of Wall Street gains is to buy and hold low-cost, passive stock mutual funds. exchange traded funds, or ETFs, that track a major index like the S&P 500. While this approach works best for most people, there are two downsides: First, you can never outperform the index you’re tracking. Second, it’s a bit boring.

Let’s say you’ve decided to dive into choose individual stocks. If you’ve never done this before, it can be a bit daunting to get started and deploy your hard-earned capital. This is where “paper trading” comes in handy.

Instead of buying stocks with real money, trading on paper simply means that you build your investment strategy with fake money and track your results. This allows you to test the success of your ideas before finally putting real capital behind your beliefs.

Although paper trading is arguably most useful for short-term trading day traders looking to test out a rules-based strategy, this can also benefit cautious aspirants buy-and-hold investor.

Here are five of the best paper trading sites and stock market simulators:

Dubbed the “virtual stock exchange”, this paper trading platform is hosted on the financial news site MarketWatch. Heavily used by individual investors, beginners, and students competing against each other in a classroom setting, there were over 40,000 active “games” at the time of this writing.

The Virtual Stock Exchange allows users to create or join a game where you can compete with others to produce the highest returns with your imaginary money. Looking to do paper trading privately? No problem – just create a private game and track your own hypothetical trades without fear of judgment.

MarketWatch offers the choice to invest in more than 5,000 public companies across the Nasdaq, NYSE and American NYSE exchanges, as well as numerous over-the-counter pink leaf picks. You can choose to start with any amount of fake money you like, up to a maximum of $10 million.

Other features include the ability to set a commission for each trade, the ability to short sell, margin trading (and a customizable interest rate charged for trading on margin), as well as limit, stop-loss and partial actions, or fractionaltrade.

This paper trading site should have most of what the average investor would want or need, although there are some minor drawbacks. Choice trading is not allowed and the end date of the game you design cannot be more than one year in the future. And for those looking to take one out on the competition, there seems to be a glitch where reverse stock splits can mistakenly multiply the value of your portfolio overnight.

Another financial news and analysis site, Investopedia, also offers a free stock market simulator along the lines of MarketWatch. In addition to the ability to trade stocks, Investopedia offers several additional features that MarketWatch does not.

In addition to stocks and ETFs, users can freely trade stock options, which adds another layer of complexity for anyone looking to explore what to sell. covered calls or testing option strategies like protective collars or iron butterflies could feel like real life.

A nice perk of the Investopedia interface is the simulator’s “learn” tab, where you can learn all about the stocks themselves, the basics of trading, stock research, portfolio management, and the basics. and options strategies.

Besides the capacity for options and the easy-to-digest educational material, Investopedia also differentiates itself by its cryptocurrency simulator. Like the real crypto market, it is open for paper trading 24/7. The Crypto Simulator is separate from Investopedia’s main stock and options simulator, and is also free once you create an ID.

Financial visualization site Finviz, which also offers news links and a daily view of the best performing and most actively traded names in the market, also offers users a way to transparently track the performance of their picks without investing. real money.

Like the previous names on this list, Finviz’s portfolio tracking capabilities don’t cost a penny as long as you create a free account. Although not marketed as a stock simulator or paper trading tool, Finviz’s “wallet” capability allows you to create a virtual wallet of up to 50 different symbols in custom allocations. You can also create dozens of different hypotheses wallets for free, allowing users to create portfolios based on different themes.

A cool feature is the ability to use Finviz’s stock filter to produce a list of stocks that meet certain criteria, then automatically create a portfolio of those stocks and track its performance over time.

While users can play around with how sell a stock short would take place, Finviz does not allow users to see what the real experience would be like, which involves paying margin interest and the possibility of receiving a dreaded margin call if your bearish the bet moves against you.

There are a few quirks and limitations in Finviz’s paper trading features – stock splits and fallouts are incorrectly accounted for, for example – but for an overview of how your trading strategies might play out, Finviz takes a look. comes out very well.

Maybe you want to go further than just creating watchlists or fake wallets. Perhaps you also want to familiarize yourself with the layout and functionality of an online brokerage at the same time, and emulate exactly what securities trading would look like with real money.

Thinkorswim is a popular online trading software offered by TD Ameritrade. If you are an existing customer, you should already have access to the paper trading feature, aptly called paperMoney. But even if you don’t have an account, you can sign up for free access to this feature alone. By doing so, you’ll get a first-hand look at some of the charting, filtering and other tools that make thinkorswim one of the most popular trading platforms for intermediate and sophisticated investors.

Here you will have access to paper trading stocks, ETFs, options, futures and foreign exchange marketsall within the advertised interface of thinkorswim itself, which offers tons of education, mapping, and analysis tools.

There is a touch of a learning curve with the platform for newer or less advanced traders, but for anyone seriously looking to trade on paper and get a feel for what it would look like in limits of a real online brokerage, thinkorswim’s paperMoney is an excellent option.

As part of Charles Schwab Corp. (symbol : SCHW) 2020 acquisition from TD Ameritrade, thinkorswim is expected to migrate to Schwab this year.

Online broker eToro also does a great job of providing a paper trading experience for users. Although its simulator is free, users will need to disclose some personal information in order to trade stocks on paper, although no such requirements are in place for trading on paper. cryptocurrencies.

With a much simpler and more intuitive interface than thinkorswim, eToro is a good option for a novice investor seeking to experience the feel of different online brokers and trading strategies without risking sensory overload from a collage of complex tools.

Those interested in crypto might prefer eToro, and its CopyTrader feature allows users to mimic the trades of select traders on the platform, whose past performance and risk profile you can also review. As with other crypto-focused simulated trading tools, eToro allows paper trading of digital assets at any time of the day and night – not just when Wall Street is open for business.