“Practice makes perfect” is one of the oldest clichés around, but there’s a strong message behind the overused saying. If you want to increase your proficiency in anything, you need to practice. This is especially true with trading, which is why you’re probably looking for the best stock trading simulator.
You won’t find a professional basketball player in the world who hasn’t attempted thousands of shots in a gym. Surgeons perform multiple procedures on cadavers before operating on any living, breathing person. And the best traders all practice with paper money before putting any real capital at risk.
What’s a stock market simulator?
Ever play Madden for Xbox or PlayStation? Pretty much every football fan has simulated the NFL experience on a video game console. While playing virtual games won’t make you a better football player, it might make you a better stock trader.
Paper trading allows novice investors to simulate the stock market experience by buying stocks and assets with fake cash. With $100,000 in pretend capital, you can build a portfolio and test strategies without taking on any real risk.
Want to see how different strategies work together? You might not be willing to take the risk if your own money is a stake. If it’s Monopoly money, though, you’ll be more inclined to explore, take chances and learn from mistakes if your trades go wrong. The goal of paper trading is to improve. You’ll learn to better identify chart patterns and trends and you might even feel a little pang of pain when one of your pretend trades blows up.
Some paper trading platforms are connected to online brokerages, which means you need a real trading account to dabble in fake money. But most simulators can simply be downloaded and “funded” instantly and trading begins whenever the market opens.
Key qualities of the best stock market simulators
The top six stock market simulators chosen by Benzinga share a few common traits:
- They closely resemble the actual market. You want an authentic stock trading experience when paper trading, so simulators must feel like the real thing. Buying and selling stocks in real-time is important, so it’s important to have access to more advanced securities and order types.
- Many securities are available. Buying and selling stocks is fun, but you might want to test some more conservative strategies such as buying and holding ETFs and mutual funds. A good stock market simulator will let you trade triple-leveraged ETNs and hold mutual funds for 40 years.
- Useful research tools and stock charts are included. What good is trading if you can’t do any research? Stock charting tools are a necessity for any (real or fake) trading platform, and it doesn’t hurt to have access to conference calls, news reports or economic data, either.
We’ve ranked the best six stock market simulators. All of them offer terrific platforms, but the top selections on this list will have all the features an advanced trader can ask for.
6. Wall Street Survivor
Join a league, go head to head with other players, and win cash prizes. This is Wall Street Survivor (not fantasy football), where you can build your own portfolio with $100,000 in paper money and compete with other investors to accrue the most wealth.
Sign up and play with strangers, or invite your friends and create your own league (after football season, of course). Either way, Wall Street Survivor is a great stock market simulator because it attempts to create reality by putting cash prizes on the line.
Bottom line: Investors will behave more like investors if there’s a real-life gain to be made.
5. Stock Trainer
Stock Trainer brings the market to you with its paper trading platform. You don’t even need to provide an email address to sign up; you’ll only need a social media account to gain access and you’ll be trading paper cash almost instantly.
The app very closely simulates real trading, as users can access chart tools and real-time news updates.
You’ll be able to track insider buying and selling while overlaying stock charts with technical indicators. There are plenty of listed securities to choose from, as Stock Trainer allows trading on markets outside the New York Stock Exchange (NYSE).
One drawback to Stock Trainer is that it’s only available for Android phones. Still, it’s one of the most realistic and inclusive stock market simulators available today.
MarketWatch is one of the top financial information websites in the world, powered by Dow Jones and Company and linked with the Wall Street Journal. MarketWatch also owns the Virtual Stock Exchange, an investing game similar to Wall Street Survivor. You can join leagues and adjust the rules to include things like margin trading and short selling.
MarketWatch also has resources for college courses, so professors who want to test students on the stock market can create games for the class.
You’ll need a MarketWatch account to play, but it’s free to sign up with your email address. The Virtual Stock Exchange allows you to build a portfolio, trade with limit and Xbox orders and devise a strategy to beat your friends with MarketWatch’s array of research tools.
4. NinjaTrader Free Trading Simulator
NinjaTrader is a cutting-edge trading platform launched in 2003 that’s already on its eighth software iteration. The real stock trading app is a fee-based system, but the paper trading platform is completely free to all users. You just need to sign up for an account to begin trading.
NinjaTrader is a big proponent of educating new investors before you dive into stock trading. Its simulated brokerage carries over all the features of the live trading platform. The research and stock charting tools available are highly interactive. You can pinpoint a location on a stock chart that you’d like to place a stop-loss or limit order and execute trades entirely from the same screen.
The backtesting option allows you to roll back the clock and trade during different time periods, too.
Want to see how you’d do during the 2008 Financial Crisis? Simply change the time period and test your strategies (and don’t buy Lehman Brothers).
TradeStation is one of the most trusted brokerages in the world, and it offers advanced trading on a customizable desktop or mobile platform. TradeStation is geared toward active traders and charges a $99 monthly fee on accounts that don’t trade 5,000 shares or 50 options contracts each quarter. It’s an expensive platform, but you can test it out for free by signing up for a paper trading account.
TradeStation’s simulator is complete with research tools, stock chart indicators, and access to the community forums where you can exchange ideas with other traders. Brokerage account holders can jump back and forth between real and paper trading on both the desktop and mobile apps.
1. Thinkorswim by TD Ameritrade
You don’t need a brokerage account with TD Ameritrade to sign up for thinkorswim. Just register with an email address and open up the platform, which contains some of the most advanced trading tools an investor can find. You’ll get customizable stock charts to not only track securities, but commodities such as gold, oil and natural gas.
The pairs trader allows you to try out long/short strategies and there are scanners for stocks, currencies, options and futures contracts.
The scanners are completely customizable as well, allowing users to search for top gaining (or losing) small-cap by exchange or sectors.
Thinkorswim is undoubtedly the most sophisticated stock market simulator available today and it’s highly recommended for all new investors.
Paper trading is a great way to practice and test strategies, but even the most realistic stock market simulator isn’t a true substitute for the real thing. Successful paper trading does not guarantee successful trading with real money. After all, it’s easy to take on risk when there’s no real money to lose. Stock market simulators are for investors to get their feet wet, but you won’t know who you really are as a trader until you “play” with the real thing.