Practice Stock Trading

If you want to make money in the stock market, you have to practice stock trading. You cannot just open up your first online trading account, and expect to make good money. It is like everything else in life, you have to practice to get good at trading stocks. There are many different online stock brokers that will let you open a trading demo account. These demo accounts let you practice trading stocks without putting any of your money at risk. If there is one thing I wish I had done when I first entered the stock market, it is open a practice account. If you have never traded a share of stock in your life and are interested in entering the market, you probably have the goal of making money with stocks. Whether you are looking into learning how to day trade, or you simply want to invest your hard earned money in some stocks; you will want to practice stock trading before you make a real money stock purchase.

How do I learn how to trade stocks?

We've covered the first step, don't put a single dollar of your own money into the market until you are completely comfortable with the stock trading software that you have been practicing with. Once you have opened an account with an online broker (make sure you pick one that advertises a free practice account), you can begin to make what are called “paper trades”. These trades are executed almost identically to real money trades with the obvious difference being that no stock actually trades hands. You can use these simulated trades to hone your skills in picking good entry points, or just use the practice trades to get comfortable with the trading platform. Most of these free practice accounts are provided by real money stock brokers, however there are a few services that let you practice stock trading and they don't have a brokerage. Some of these companies actually offer competitions and prizes based on how well you do with your paper money account. This is a very good option to consider if you are not chomping at the bit to invest real money.

There are countless theories and methods to investing in the market. Everyone has there own favorite reason for believing a stock will go up, or the market will go down. Two of the most prevalent schools of thought are fundamental analysis, and technical analysis. Fundamental analysis deals with the finances of the company (revenue, liabilities, assets, price/earning ratio, etc..). Technical analysis deals with the price history of the stock, also known as charting analysis. Most of these theories have some merit (and some flaws), my advice is to open an account, and practice stock trading for yourself. Once you feel ready to jump into the market, you will already be at an advantage because you have a little practice under your belt.