The advantages of a stock trading simulator

More and more trading simulators are offering you the opportunity to try your hand at the stock market without any risk. Known as demo accounts when they are provided by brokers, these trading simulators are now accessible via independent sites. Most often free, a trading simulator has many advantages, especially for investors who want to start speculating via CFDs without in-depth knowledge of the markets.  

78% of retail CFD accounts lose money. You should consider whether you can afford to take the high risk of losing your money. This is an advert for trading CFDs on eToro
The advantages of a stock trading simulator
Analysis N°1

The main advantage of a stock trading simulator is that it will help you to know if you are profitable as a trader. By trying your hand at the markets in real market conditions, you will only have to see how well you are able to make your fictitious capital grow to determine whether or not you are ready to go live.

Analysis N°2

Another great thing about these fake trading accounts is that they also help you with your online investment training. Indeed, while going through training modules about different strategies for online investing, you can test them live without having to worry about the consequences if you don't master them immediately.

Analysis N°3

Still regarding these trading simulators and when they are provided by a broker, we note that they have the advantage of taking all the features of the platform of this broker. Thus, you can take the time to familiarize yourself with these features so as to master them to the maximum when you decide to switch to real trading mode and thus trade with your own money.

78% of retail CFD accounts lose money. This is an advert for trading CFDs on eToro

What is a stock trading simulator?

A stock market trading simulator is in some ways a market place allowing investors to trade securities online without having to invest any money. These simulators most often offer a fictitious capital to realize the gains and losses made. This capital can be limited or unlimited depending on the platform.

The main objective of a stock market simulator is of course to allow you to try your hand at trading without having to take any risk. It is therefore a qualitative learning tool since the investments made are made under real market conditions.

Finally, the stock market trading simulator is a way to access the world of the online stock market for free and in a fun way. Interesting, it allows you to discover this world and to learn by experimenting in order to improve your technique and to be able to launch yourself in real market conditions.

 

What are the advantages of a stock market trading simulator?

Thanks to the possibility it offers to trade on real securities and in real market conditions, the trading simulator is a really interesting training tool. Indeed, the results obtained on such a simulator are exactly the same as if you were trading with a real account.

Using a trading simulator allows you to learn the different mechanisms that govern the price of stock market assets, but also to become familiar with the different features found on traditional trading platforms such as deferred orders or analysis tools.

Finally, the main advantage of the stock market simulator is that it is risk-free and does not lead to any loss even if, of course, the gains are not real either.

 

How does it work?

Using a stock market trading simulator is exactly the same as using a real trading account like those offered by CFD brokers, except that the money invested here is fictitious.

You invest on the real price of the assets you choose and have the same tools and features as if you were trading with real money. Your positions are taken live and the chart and fundamental analysis data is the real data that real traders use. You can test many strategies until you are sure that you have mastered how stock market investing works.

 

What is the difference between a stock trading simulator and a real trading account?

The main difference between a trading simulator and a real trading account on an online platform is of course the money. Indeed, with the simulator, you will not need to make any deposit to start trading. It is primarily a training without risk and without cash profits.

However, some simulators offer contests that sometimes allow you to win some money or prizes.

In addition, some stock market trading simulators do not include all the features of brokers or offer additional features, particularly in terms of learning.

 

Summary of the qualities of a stock market trading simulator:

To conclude this article, we propose a reminder of the various advantages and therefore the benefits of the stock market trading simulator:

  • It allows investors to train for free and learn how to organize themselves and place orders online.
  • It also allows you to improve your knowledge and mastery of the markets by testing new strategies without taking risks.
  • Most stock market simulators are free.
  • The stock market simulator is a good way to test your level before starting to trade with your own capital.
  • A simulator also allows you to identify the easiest and most profitable assets to trade.
  • It allows you to create a balanced portfolio with effective hedging strategies.
  • Finally, the stock market trading simulator is a great way to have fun without risk.

Frequently Asked Questions

Why is it important to practice trading with a simulator?

The use of a trading simulator is interesting from a training point of view. On the one hand, it is essential to acquire theoretical knowledge about investing in the stock market and the financial markets, but it is just as important to be able to test this knowledge in a practical way without risking your capital and to find out if this activity is right for you. This is why trading simulators exist.

How do I choose a good trading simulator?

There is no shortage of trading simulators on the market and it can be difficult to choose the most effective one. Generally speaking, always choose the simulator offered by the broker you wish to choose next as this will allow you to test their trading platform and its various features and tools. Otherwise, you will have to compare the opinions and quality of services offered by each simulator.

Are there any no-download online trading simulators?

While many trading simulators need to be downloaded and installed on your computer or tablet in order to work, many can also be used directly online and do not require any download. These are demo platforms where you can log in to practice by simply entering your login and password which your broker will have given you when you signed up.

eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78% of retail CFD accounts lose money. You should consider whether you can afford to take the high risk of losing your money.

Past performance is not an indication of future results. Trading history presented is less than 5 complete years and may not suffice as basis for investment decision.

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