Which online brokers offer simulated or virtual stock trading platforms?
There is more than one way to invest in the stock market and while many investors will debate that one approach is “the right way” to go about investing, it’s my opinion that any approach is “right” if you’re making money by employing it… consistently.
That said, most people should avoid day trading, in my opinion. The casual investor should avoid this type of investing and instead stick with indexing and long term investing. But if you insist on wanting to learn how to trade stocks or options, then you should start out by testing the trading waters first by using a virtual trading platform that allows you to invest without risking your own money. Paper trading will help you determine if you’re cut out to be a day trader (or any kind of trader, for that matter).
There are quite a good number of discount brokers and investment websites that provide this simulated trading service for free. Here are a number of them:
Day Trade By Paper Trading First! Try These Investment Resources
Zecco is known for its ongoing free stock trades offer. They’re the only brokerage with this feature: as a customer, you’ll receive 10 free stock trades per month if you make at least 25 trades monthly, or if you have a minimum balance of $25,000. And their regular trades are pretty cheap at $4.50 a trade. Zecco also has an active investing community with a forum feature and a simulated trading platform called the Zecco Zimulator. Zecco Zimulator is a free trading game that comes with a lot of other educational resources at the Zecco site. Some features:
- Invest in a risk free environment.
- Test your ideas without committing your own money (use “play” money).
- Compare your results based on real world results.
- See how other virtual traders perform.
- Trade for fun.
For more details, check out the Zecco site.
This broker offers $7 per trade and has several trading tools, one of which is their Scottrade ELITE Virtual Trading Demo, which aims to give you a realistic view of how their actual trading environment works (called the ScottradeELITE Advanced Trading Platform). You’ll be able to use the platform with $100,000 of virtual money to use for trading. The market data it provides is delayed by 20 minutes given that you’ll be using a demo account. For more details, check out the Scottrade site.
One of the cheapest brokers in the industry, OptionsHouse offers a flat $3.95 for stock trades. Right now, you’ll get 100 free trades simply by opening an account. They’ve got a virtual trading system that uses the full suite of OptionsHouse tools such as streaming charts, news and tracking tools. I noticed that their emphasis may be on teaching you how to trade with options although they do cover standard stock trading activities as well. So if you open an account, you’ll have access to the virtual account, which will start you off with $5,000 of play money. You can increase your virtual account balance incrementally over time. For more details, check out OptionsHouse here.
Another well known stock and options broker, optionsXpress has commission rates that are between $9.95 to $14.95 per stock trade, depending on how many trades you make. But they have an ongoing promotion right now, which will give new customers $100 cash for new accounts after 3 trades have been executed. They also have the Virtual Trade platform, which will allow you to use the optionsXpress account screens, tools and resources without putting your money on the line. For more details, check out optionsXpress here.
Pricing for TradeMonster is a flat $7.50 per stock trade. They’ve also got some solid tools here, including paperTRADE, where you can learn and practice how to trade stocks. This platform boasts drag and drop customization, real time streaming quotes, charts and balances, risk analysis, performance charts, etc. Again, no need to risk your own money here when you can learn the ropes by trading stocks, covered calls, and even complex option spreads. For more details, check out TradeMonster here.
Not very many people may know this but the people behind WeSeed are affiliated with those who run OptionsHouse (PEAK6 Investments, L.P., a highly successful options trading firm), so they’ve got some top investment talent and experience behind this site. Membership is free and its aim is to help people learn and understand how the stock market works by allowing you to invest with WeSeed cash. You can build a portfolio and get educated on investing, but there’s also a social element to this site called WeSocial, where you can connect and invest with other members.
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There are other brokerages and sites with a variety of trading tools that can help you learn how to trade. I would recommend TradeKing and ETrade for this purpose as they are highly rated (garnering top awards from financial publications) for their tools and customer service.
Those eager to start investing should begin by reading about how to invest. Most investors should stick with long term investing and should develop a diversified investment portfolio that can withstand market gyrations. But those who want to try some trading should determine if they’re built for this by doing some fantasy stock trading first. See how you compare to successful traders out there and find out if you have the knack for it. I wish there had been more of these platforms available to me when I first started investing — if so, I would have probably saved myself some serious money over the last few decades.
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