Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Paper Trading

What it is:

Paper trading is simulating market trading (buying and selling). 

How it works (Example):

Investors can practice trading by simulating securities purchases and sales without actually executing transactions with money.   Paper trading can be done using real-time online market simulators, allowing investors to practice placing orders, executing transactions, monitoring market and portfolio activities, all without the risk of losing (or gaining) money.

Why it Matters:

Investors can use paper trading to learn about the markets and the mechanics of simple and complicated trading techniques without the risks associated with investing in the market.