If you have never traded but want to try it out, then virtually trading stocks may be the answer for you. Trading is a piece of cake nowadays and you can try it out completely risk-free by using ‘play’ money. But how does virtual trading work?
Virtually trade stock
In the past, trading stocks was mostly done physically, traders went to the stock exchange to buy and sell stocks on the floor. With the huge advances that have been made in communication technology, we can do this a lot better and faster. Anyone can now trade stocks virtually and because the market is becoming more and more digital, the costs of trading have also dropped tremendously.
Did you know all of this is possible?
- You can short, meaning you make money when the price goes down!
- You don’t need a huge amount of capital, you can start out small.
- You don’t pay any commission when you buy a stock through an online broker.
- You receive a dividend at time of payout.
- You can try out trading stocks completely free using a demo!
What to look for when trading virtually
Stocks move a lot more unpredictably than say currency pairs because the market for stocks is a lot smaller, an article in a huge newspaper could have influence on the price of a stock. By keeping an eye on the news you can profit from sudden movements, you can buy and sell stocks almost instantly online.
When you buy a stock you expect that the price will go up. When this is happens, the money that you make will be credited to your account. If you expect the price of a stock to drop, you can sell the stock so that you make money when the price goes down.
Make more money
There are two reasons virtual trading is more lucrative than traditional trading. The first reason is the fact that you can use what is known as leverage. By using leverage you can start trading with a considerably lower amount and still open up a hefty position.
The second reason is the fact that the fees are a lot lower. It’s a lot cheaper to trade virtually. If you were to trade using a bank or an investment fund, you would pay a fixed fee per transaction or per order. These fees make it very expensive for those who trade with smaller amounts. An online broker lives off of the total volume on its platform, meaning it makes a little money on every trade, but it has a lot of volume. Low costs for you means you can make money on the slightest change in the market.
What is the best way to understand stocks?
Trading stocks can be overwhelming at first. There is so much to choose from! You can trade stocks that are available on a large stock exchange in the US or the United Kingdom, but you can also trade stocks that are traded in Greece, for example. I started by following a few stocks from companies that I knew. This way you will learn how to recognize patterns and you can make money trading stocks.
The best way to learn how to make money trading is by practicing. You can open up an account with a broker very quickly and by using the broker’s demo you can try out trading completely risk-free. You will eventually discover how you can open up profitable positions and make money!