Popular Paper Trading Accounts for Beginners 2024
Trading is not as easy as most people think. While it offers high rewards, it involves significant amounts of risks. That is why you should look for trading platforms that provide paper trading accounts.
Paper trading can help you familiarize yourself with the concepts involved in trading, get access to all the features of a trading platform as well as test new trading strategies without investing real money.
Read on to learn what paper trading means, its benefits, find some popular paper trading platforms and much more.
Step 1. Open a Paper Trading Account
A paper trade is a simulated process that enables an investor to trade without risking real money.
The term originated from the time before online trading platforms proliferated. Aspiring traders would practice on a paper before risking their investments on live markets.
Nowadays, paper trading involves the use of an electronic simulator commonly known as a demo account. In most cases, the simulators look and feel exactly the same as the live stock trading or forex platform. Paper trading apps generally have free virtual paper money that you can use to test new trading strategies.
Criteria used to pick paper trading sites
Our review provider reviews are based upon the following factors:
- Broker’s Reputation,
- Availability of paper trading environment
- Trading platform functionality
- Charges and Fees
Popular Paper Trading Apps & Platforms
CryptoRocket - Popular for Cryptocurrency Trading
Cryprorocket is a relatively new online trading platform. Although it puts a lot of emphasis on its cryptocurrency-related offerings, it also offers a wider range of assets. Its MetaTrader 4 (MT4) platform is also easy to use when using both desktop and mobile devices.
Practicing is an indispensable part of the trading journey. To get familiar with what the site is offering, you are recommended to download and try the MT4 demo account. You don’t need to register or even deposit any funds to get started on the demo account. In addition, it is possible to have more than one practice account as long as you are active. The demo account offers real-life trading conditions and pricing, just like on the live account. If you encounter any issue, you can contact the customer support on the live chat.
This trading platform is available for users all over the world, excluding countries with strict restrictions like the US. Some of its features and products may not be available in specific countries because of legal restrictions.
Also, Cryprorocket offers safe and reliable web and app-based interface. The web-based platform can be accessed easily on any browser without the need to download or install additional software. On the other hand, the mobile app is available on both Android and iOS devices. By downloading the app, you access your paper trading account and trade on the go.
Although, Cryptorocket is not regulated by any government agency, it is headquartered in Saint Vincent and Grenadines, which is a privacy-friendly country. It works very hard to ensure its platform is secure 24/7. In fact, its trading platform is monitored daily for suspicious activities.
One of its key features is the Straight-through-Processing (STP) execution model. This means that you will not need to worry about re-quotes and desk intervention when placing a trade.
- 24/7 customer support
- No deposit and withdrawal fee
- STP execution model
- Not regulated by government agencies
Step 2. Learn how paper trading works
A paper trading app works in the same way as the live trading account. The only difference is that there is no real money involved in paper trading. This means that you can afford to make mistakes in your paper trading account without losing any money.
Using a paper trading app is very simple. Log in to the trading software, filter and select the specific asset you want to trade. Next, decide at what price to trade the asset. For instance, if you intend to invest in stock trading at $13, make a buy order. Once the buy order transaction is complete, your account will have a record that you have bought the share. Once you’re ready to sell it, simply click the ‘Sell’ button and specify your selling price.
After practicing for a while, you will be able to learn from your mistakes and improve your trading skills.
Most online trading programs offer both paper trading and live trading accounts. The advantage of this kind of arrangement is that it is easy to switch between the two accounts.
Features to Look for When Choosing a Paper Trading Platform
The first thing you should consider when selecting a paper trading platform is its order flexibility.
The paper trading app should enable you to place limit, stop loss and execute other conditional orders just like you would on the live trading account. Some sites can even allow you to automate orders based on defined triggers and technical patterns.
Customizable analytical tools
Don’t be afraid to try new chart patterns or technical indicators into your trading practice. The point of using paper trading is to learn how to trade like a professional. Technical analysis on the paper is one thing but seeing it in action is a different thing altogether. So, choose a paper trading platform that is loaded with plenty of analytical tools.
A paper trading platform that is difficult to navigate will offer more frustrations than relief.
Choose a paper trading platform with an easy to use interface and avoid anything that will require you to go through a lot of steps to execute a single trade.
Many trading apps offer free paper trading accounts while others require you to pay for real-time data or even the simulator itself. The cost will mainly depend on the information you want and the stock, CDF or future broker you are dealing with.
You should look for free paper trading app that will not require you to create or fund your account.
Apart from giving you access to the same portfolio tracking as the live trading accounts, some platforms will enable you to see where you thrived and where you may have gone wrong. Choose a platform with such features, especially if you want to test out a lot of trading strategies e.g fundamental analysis, the Fibonacci trading strategy or trend trading etc.
Step 3: Opening Your Paper Trading Account
1. Here we provide an overview of how to sign up to your new trading account. The process involves KYC (know your client) information, this is typical of all trading companies. Once you open the account you can then transfer the funds and then you are ready to trade.
2. The virtual profile indicated below is only available for verified accounts so you’ll need to complete all details. The platform will then let you switch the trading platform between the real and virtual portfolio environments as shown below.
3. If you need more information about a particular strategy, you can explore within the platform, which has a detailed knowledge bank. It tells you about the methodology, portfolio, allocation, and various data points related to performance. For new investor’s it’s useful to explore using the copy trading functionality, which lets you take advantage of the skills and expertise of experienced pro traders.
4. Once you decide on the trading strategy that you want to follow, you need to decide on the amount that you are prepared to risk and set limits on your trading account in case the value of your investments falls below your pre-set threshold.
Paper trading is a way to try and test trading strategies. However, even the most popular trading simulators cannot be a substitute for live trading. You should also remember that paper trading does not guarantee success in real trading.
What are the key features of a popular paper trading platforms?The paper trading platform should be as close to a real live account as possible. So, choose a paper trading platform that offers plenty of functional features, intuitive interface, accurate market quotes and realistic user experience.
What is the difference between paper trading and real trading?The only difference between a paper trading and a real trading account is the currency used. Paper trading simulators use virtual currency while live trading accounts involve real money. Generally, all the features found on the live account can also be found in your paper trading account.
Who should use paper trading?Paper trading is particularly ideal for traders who are new to trading. Nonetheless, also experienced traders can use paper trading to try and test new strategies before implementing them on their live trading accounts.
What is the preferred way to use a paper trading platform?To make the most out of a paper trading platform, you should create a trading plan. Record as much information as you can such as the opening price, closing price, etc. You should also use it to find out which trading strategy works for you.
Why is paper trading important?You can be a genius trader in theory but very poor in real trading. Paper trading helps you become a professional trader by giving you access to a real trading platform that has free virtual money that you can use to trade.Scroll Up