Maybe you’ve been studying stocks for a while now but, as a young investor, find it difficult to pull the trigger and risk real money in the marketplace. Never fear, your friends at Young Wealth have an idea that might help.
The trick is how to get a close approximation to live trading conditions without losing real money. Currency market brokers had this figured out a long time ago and now we’ve begun to notice stock brokers taking the cue – practice accounts are what we’re talking about.
A practice account with an online broker is exactly what it sounds like. You register at no charge, open an account, and are immersed in a real world computer screen with charts, graphs, news, live streaming quotes. There’s money in your account even though but it’s not real. This is how to simulate trading and not lose a penny.
In almost any endeavor, practice makes perfect, or at least a lot better than you were before you started practice. With a simulated trading account you can execute trades, lose or gain money, test strategies, or just find out if you’re ready for the big time of making trades with real money.
We think it’s a great idea for a young investor to use his practice account as long as it takes to prove himself a profitable trader. If you can’t trade profitably on a practice account, why the heck would you want to move on to a real one? Be patient. Sooner or later, you’ll get there.
The Young Wealth Team
Flickr / YoTuT