Practice Stock Trades with Paper Trading - Money Tip Tuesday

If you’ve been interested in trying your hand at stock trading this year, here’s a way you can try it out and see how you do without risking a dime. Paper trading can be a great way to practice stock trades and gain familiarity with market terms and strategy. 

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Transcript:

Welcome to Money Tip Tuesday from the Making Money Personal podcast.  

The beginning of a year is the perfect time to try something new. 

If you’ve been interested in trying your hand at trading but may be a little apprehensive at the risk that’s associated with it, there is a way you can try out your own trades without risking your money.  

This practice has been used by many in the past and is just as useful today and it’s called paper trading. 

Paper trading was historically used to practice making trades by hand with a pen and paper to keep track of your positions, profits and losses. 

Today, if you want to do it the old-fashioned way you can, but it’s even easier now with digital simulators that make it more convenient.  You can find these as free online tools and some brokerages offer it as a special account tied to their own platform.  

If you’re a novice, it’s a good strategy to try out your trading without the chance of losing money. 

You’ll learn valuable information and get a better understanding of industry terms, learn how to recognize investments to see if they are worth buying, get experience researching companies, learning about their track record and their credibility, and just gain a more comprehensive understanding about how the trading world works. 

It also gives you an idea of how you would act based on market changes because fluctuations and corrections can impact your decisions.  

If you’re a more advanced investor, paper trading is a great platform to try out new investment strategies you might have in mind to get an idea of how they will perform. 

And if this year you were considering trading penny stocks, try it all out in a simulation first because penny stock trading can be volatile and you don’t want to lose your shirt on your first try. 

If you’re interested in finding a paper trading platform, for risk free stock trading , you can start by checking with your current brokerage account or if you don’t have one yet, do a quick search in Google for paper trade simulators and you’ll find a bunch of options to choose from.  

If you have any other tips or topics you’d like us to cover, let us know at tcupodcast@trianglecu.org and don't forget to like and follow our Making Money Personal FB page and look for our sponsor, Triangle Credit Union, on Instagram and LinkedIn to share your thoughts.  

Thanks for listening to today’s Money Tip Tuesday and be sure to check out our other tips and episodes on the Making Money Personal podcast.  

Have a great day!