WHY DO EXPERIENCED INVESTORS ALSO USE SIMULATION TRADING?

Key Highlights

• Simulation trading allows investors to try market trading without risk, which can cultivate a trader's trading skills.

• Simulated trading not only allows novice traders to gain trading skills and experience, but is also valuable for experienced investors.

• The experience of simulated trading cannot mimic the intense emotional shifts in real trading caused by unpredictable market changes.

Learn about Simulation Trading

WHEN WE TALK ABOUT SIMULATION TRADING, WE ACTUALLY MEAN SIMULATION TRADING EXERCISES. By simulating trading, investors can have the opportunity to try market trading without risking losing any capital in the real market and see exactly what happens when investing in the stock market.

In an era before the advent of the web, people simulated trading on paper. They can track the performance of the stocks they are interested in as well as the final investment results. WITH THE ADVENT OF ONLINE TRADING PLATFORMS, PEOPLE CAN CONDUCT ONLINE SIMULATION TRADES THROUGH SIMULATION PLATFORMS, WHICH ARE VERY DIFFERENT FROM REAL TRADING PLATFORMS. MANY ONLINE BROKERS WITH DEMO ACCOUNTS EVEN OFFER DEMO TRADING APPS THAT ALLOW TRADERS TO MONITOR THEIR DEMO ACCOUNTS ANYTIME AND ANYWHERE.

Why do experienced investors also use demo trading?

Many people may think that demo trading is only useful for beginners, in fact it is also quite valuable for experienced investors.

Experienced investors can use mock trading to try unfamiliar products or investment strategies without the risk and stress of real stock trading, building their confidence in new products and new strategies, thus serving as a reference for real investments.

How to Maximize the Reap of Demo Trading

To help you excel in real stock trading, you need to make sure you are well prepared to gain as much experience as possible in this hot area. Here are four things you need to keep in mind when doing demo trading.

Avoiding Impossible Investment Plans

Remember that when using demo trading, your mood will be completely different when you invest in real silver in various accounts. When you know that your only “investment” will not affect your true wealth, you may end up with some dummy trades that don't make sense. However, since these situations may not happen once you get into real live trading, they are of no value to you. So try to avoid impossible investment schemes as much as possible in demo trading to achieve a more effective simulation effect.

Practice the investment strategy you will actually use

When you do demo trading, you have the opportunity to try trading strategies that you are not familiar with. So don't waste time testing programs that are more risky than you can afford, but rather test strategies you'd rather put into practice. And, be clear about your investment goals in demo trading as well, which will help you achieve your goals in real trading.

Organize valuable information and statistics

Those entering the investment field will find that a thorough understanding and analysis of the market is a prerequisite for coping with various market changes. By organizing valuable information and data statistics on the companies you are interested in while simulating trading, you will gain a better understanding of how they react to different market conditions and your ability to predict market changes. This can help you make better choices in the real dish.

Familiarize yourself with different types of orders with simulated trading

Finally, make sure you understand the types of purchases you can make on the stock exchange when using demo trading.

• Market Price Orders

A market price is an order that is traded at the current market price. If you decide to buy a company's stock at some point, you can create a market order.

• Limited-price order

A limit order is an order that you create that will only be executed when the stock reaches a certain threshold. In other words, if you want to buy a stock with a current market price of $60, but you want to trade at a price of $55, then you can create a limit order specifying that you want the order to trade at this price. When the price reaches this point, your broker (or online platform) will submit the order. But because market prices are constantly changing, there is no guarantee that your order will be successful.

Start your investment journey

Simulated trading can provide powerful support when learning how to invest or learn new trading techniques and strategies, testing your judgment and skills, and helping you build investment confidence. Please note that this does not completely recreate the state of your love in real trading. If you are prepared to start your investment journey, Futubull is your best investment platform to choose.