Why paper trade?
There are a number of reasons to do this.
In summary, it is a fantastic way to gain close-to-realistic experience
with share trading, and to test your intended trading strategies.
- Many people who rush into share market investing
lose money. By practising first, this situation can be improved.
- It is possible to have many consecutive losses. It
important to realise this, and to experience it (in a controlled
no-loss environment), and to be able to cope with it psychologically.
- It is important to get a good feel for the concepts
of cutting losses early, and to practise it.
- Novices in the market will gain good emotional
experience by pulling the trigger themselves.
- It is an opportunity to test out a trading strategy
in a realistic environment without committing or risking any real money.
- Many people don't realise how much brokerage costs
can impact on potential profits. A good trading simulator will
This question is answered in more detail the first page of
Brainy's eBook (PDF) Article, ST-3100, "Trading practise - Back Testing
and Paper Trading".
Toolbox Members can see more details in the full Article here.
(Non-Members can see the "Page 1" of all
from the Table of Contents page.)
For a number of years now, the ASX has been
running a share market trading game twice each year, with costs and
advertising sponsored by a corporate sponsor (mostly one of the large
banks). There are normally two games offered concurrently - one for
school students, and one for the public.
There are usually two games in each year, running for about 16 weeks -
one from about February to June, and one from about July to November.
To play the game, you need to do three things:
- Sign-up on the ASX web site, and
create your MyASX login-id. This is free, with
no obligations, and no spam. MyASX is a collection of free sharemarket
services including:- online classes, personal watchlists, and more.
- Pre-registration - Express an
interest in playing the game, so that they will notify you when
registration is open.
- Register to play the game
- within the 2-week period just prior to the game starting.
ASX Sharemarket Game - how it works - brief overview
- Brief introductory information about the
game is here..., including information about any prize pool
(usually $5,000 cash prize for the winner, plus more).
- Create your MyASX login-id.
- Pre-register to play the game before the next game
starts - they will send you an email reminder when registration.
- Register during the registration period.
- The game is based on a number of companies (recently, 150 companies) on the Australian market.
- Each player is allocated $50,000 of fantasy money.
- There are a number
of game rules regarding position size, and other limitations.
- Place buy and sell orders at any time of the day.
orders are executed in line with the market and will match real orders
in the market. If a stock does not trade, or trades thinly, this is
reflected in your trading history.
- Read the latest Game Newsletter for game
information, and occasional tips and hints.
Sharemarket Game - some tips
If you want to play the ASX Sharemarket game, then here are some tips
to help you succeed:
- The trend is your friend. If you invest before a
confirmed, on the "hope" that a trend is imminent, then you are
- Set a Stop Loss for every position held, and if
the Stop level is hit, then Sell without question - do not hesitate. In
the game we can't actually place a conditional sell order, so we need
to watch our stocks every day.
- How to do all this? -
Prepare a price chart. Make notes on the chart (the reasons why you
want to by the stock). Note the Stop Loss level at which you would sell
if the price falls. After the buy is made, note the actual buy price on
Other paper trading options
The following list of additional methods and
options is not currently recommended; but is
offered here for exploration opportunities:
NOTE: These are not recommended.
Share Market Terminology
See Brainy's eBook Articles, and the Master
Index list for details.
|Robert writes information from time to time about
the market and investing. If you are not a
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the Testimonials - the things that people say about the
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Brain provides various support to both new and
experienced traders and investors.
is Robert Brain?
The toolbox is an arsenal
of weapons to help you tackle the share market.
See a list of contents on
The Share Market
- more information about the market and investing and trading.
And whatever you do,
beware of the sharks in the ocean!
This is one of the
many tools in Brainy's Share
The information presented herein
opinions of the web page content owner, and
are not recommendations or
endorsements of any product, method, strategy, etc.
For financial advice, a professional and licensed financial advisor
should be engaged.
Copyright 2011-2014, R.B.Brain -
Consulting (ABN: 52 791 744 975).
Last revised: 2 September, 2014.