What is Paper Trading?
Paper trading is quite similar to the trading of the stocks by performing all the tasks related to the trading of the shares in the stock market. However, the only difference being, the account used for trade of the money is fake money in the fake account. For instance, you can place your money on the previous day stock and also re-run the last day to execute the trading function. Here, you see, experience everything functioning like you are buying the shares, orders have been filling, you are selling the shares and many related tasks are performing. It does not make you earn money, or it does not end you up losing the money. It is all operated in practice mode.
Who For Paper Trading?
Paper trading is principal trading, especially for beginners. The beginners in the stock trading business can make the best use of paper trading. It helps to gain experience before they jump into the real and live trading.
Steps To Go For Real Trading
Though it is not the only sequence of steps to go through paper trading, the following steps can make you logically take you to potential stock trading.
Education – The first step is to complete the training to whichever the degree you want to achieve.
Paper Trading – After you finish your education, go for paper trading.
Live Trading – Once you gain confidence from the paper trading, you can go for the live trading. And you should move to this next level, only after you confident about trading the stocks in the real stock market. Live trading gives you life experience. You need to be very careful when you go for the live trading, as your account may blow out if anything goes wrong. So, the first thing to consider at this point is to go for the small shares. It is essential to start with the less number of shares and going forward to keep increasing one share, another stock, and so on.
After you are confident and start earning the profits from the small number of shares in your first real and live trading, you can start investing for the more significant number of shares. Once you reach the live trading efficiently and performing well with the stock trading, you will learn the lot more than what you learned from the paper trading.
There are many things that you learn from live trading, and the first one, needless to mention here is human psychology. You would understand how social psychology works at various points of stock trading. The biggest motivation for the stock trading remains here is the real money, as this is the money you are trying to play with primarily. You would also learn to manage the anxiety, controlling the fear and many more emotional swings and will learn to be stable emotionally and gain the profits consistently through the stock trading.