If you are new to the trading , it is very important to understand the market . But in this situation understanding market means loosing your hard earned money . So there is a way by which you can learn trading and take market experience without investing your money , this is called Paper Trading .
Introduction to Paper Trading
Paper Trading is a method of buying and selling stocks without putting real money for learning purposes . It is a trading simulation because you get experience and knowledge by staying away from the market . Paper trading platforms create such a enviroment that you do not feels like Simulation . Trades placed during this time will not create any changes in real market . The word ‘Paper Trading’ refers to old time when there was no trading softwares , so people use pen and paper and predict the movement of market .
When to use Paper Trading ?
- When you are completely new to the market and you want to learn trading without putting real money.
- If you are experienced in market but you want to learn new trading strategy then you can use paper trading .
- When you are trading in one market suppose stocks and you want to go into crypto so you can use paper trading.
- If you have lost your confidence so you can use this to regain your confidence.
Advantages of Paper Trading
- The main advantage of paper trading is there is no risk of loosing money.
- No real money involve in trading so there is no stress .
- You can master any trading strategy by doing paper trading.
- You will gain more confidence and knowledge .
- There is brokerage ,you can take unlimited trades.
Disadvantages of Paper Trading
- No real money involves so people dont experience real risk factor.
- Some people gets overconfident ,so when they come in real market they make losses.
- Due to habit of paper trading ,they forget about brokerage and other charges.
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