Virtual Stock Exchange, which is commonly referred to as Paper Trading, is a trading method in which new investors are given a chance to trade without actual money and hence realize the actual trading process, its risks and gains without losing any of their assets in real. It can be thought of as a replication of the actual stock market trading. It is basically a game played on the screen or with paper from which one can learn well.
Stock market games have imaginary money which is traded in the form of real money where one comes face to face with the reality of the stock market. These games also help people to judge whether they fit into the world of stock market trading or not. Everyone does not have the guts to handle losses and that is what the game teaches them, that anything can happen anytime if a wise mind is not put into correct usage. A player can devise strategies, fail multiple times without losing anything and when finally, ready, can step out and say hello to the real exchange.
Paper trading accounts give the account holders an opportunity to establish both bull credit spread and a bull debit spread concurrently. This helps them to test the changing of payoff for all positions as and when the market shifts. Other advanced schemes and strategies can be well employed while doing a virtual stock exchange. Leverage, forex, short-selling and derivatives trading are well included amongst the strategies used. Wise and clever usage of these schemes with technical information can transform a newbie into a successful trading wizard before the person even enters the real trading pool. If the trader continues to maintain the same strategies and trades carefully, it means the person has very well emerged victorious and all credit goes to paper trading.
This virtual trading is categorized into two primary categories mentioned as follows-
- FINANCIAL SIMULATORS
It is very realistic and the users get virtual currency while trading this way. Real trading feed which is delayed by a time span of 15 to 20 minutes is provided to the user and the company provides its own data so as the customers do not use their own. Some companies also imitate data and prices. However, this data is generally random. This trading nearly shows the stock aspirants the real picture and prepares them better for making an entry into the real place.
- FANTASY SIMULATORS
Trading real-life goods such as movies, television shows or sports which are not actually traded in the stock exchange are the fundamental of fantasy simulators. It is like betting or gambling and has a lesser link to actual trading as compared to financial simulators.
Well, Virtual Stock Exchange is probably the best way by which stock aspirants can comprehend whether or not they are eligible for this share trading or not. Any investor who is thinking of starting trading is always advised to trade virtually because that is the best way to learn many of the aspects of the stock exchange.