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.
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Cached on May 24, 2012, 10:42 am