Sometimes referred to paper or fantasy trading; virtual stock trading a simulator stock market. This simulator helps a newbie trader learn the ups and downs of trading in the stock market. This system educates the new trader on the dynamics of trading.
Generally, most websites that have a simulator trading platform also have a real trading platform where one can buy and sell shares at a profit. This platform is usually similar to the fantasy one except that the virtual one is not real. There are also websites that have fantasy markets from which one can actually profit from. Through these sites, one can put in seed money just like the real markets.
To make profit in the fantasy trading, you must be able to understand technical analysis. Most websites have indicators which will help you determine whether the prices will move up or down. Most paper trading system use statistical analysis for determining what price a stock will be at one particular time. There are though others that use actual feeds from the main market.
You can use indicators such as trends, candlesticks and moving averages to determine whether prices will move up or down. Some systems have these indicators incorporated in their platform; all you have to do is only apply the desired one. Knowing how to use these indicators will determine whether you make some profits or not.
It should be noted that the fact that you are profiting on the fantasy trading does not necessarily mean that you will also profit in the real markets. When real money is involved it changes everything. Emotions like greed and fear are real when trading stocks and may potentially cloud your judgment.
A major difference between these two systems is that in the real thing, real money is involved while in virtual one, virtual money is involved. Profits and loss you make when trading fantasy systems are not real. Mostly, the fantasy platform will give seed money to trade with, usually not real money.
Similarity between the two systems is that both use similar indicators and that trading techniques in both systems are the same. You will find that a number of websites have the same platform that is used in the virtual trading. This helps acquaint traders before joining the real market.
Trading the virtual system will teach you several tricks which you can apply in real trading and make profits. The system will teach you how to use money management techniques which are vital if you are to profit in this market. You also learn to use fundamental analysis which you can use to determine what direction prices will move.
It is however important to note that trading in stocks involves a substantial amount of risk. You should only trade with money that can afford to lose. You should do fantasy trading for sometime before you can venture into online market. This is of importance and will save you from heart ache and financial woes.
Now that you just learned the basics of virtual stock just now, we would love to show you about virtual trading today. We have some nice information for you.