I’m going to talk to you real quick about using something called “paper money” in order to learn how to invest. Paper money trading is really cool. Let me tell you about it.
What is Paper Money and Paper Trading?
What is paper trading? Paper trading is an idea that means trading stocks with pretend money, but doing it with real numbers in real time.
By combining the internet with the idea of paper trading, we have a really great package for online stock trading that helps us develop ourselves as investors, without taking any real money risk. We can also trade paper money without incurring the kind of emotional trauma when we use real money and we know that we don’t know what were doing.
How to Set Up a Paper Trading Account
What you should do is get yourself onto one of the paper money trading sites. Think or Swim is the one that we use a lot, but there might be some other great sites out there. Just google “paper money” or “paper trading” and go out there and get your account set up.
After you sign up, on thinkorswim.com you end up with about $200,000 of pretend money to “invest” in a system that’s using virtually real time data.
Why You Should Practice Stock Trading
When you start investing you want to see that the effects are going well for you before you go out and start investing with real money. You want to have the benefit of doing some real trades before you start using real money because stock trading for beginners can be scary using real money when you’ve never done it before.
What Do Rule #1 Investors Use Paper Trading For?
Rule #1 Investors use paper money all the time. We do back testing with paper money, we practice trades in paper money and we use it in all of our classes. Get set up with a paper trading account as soon as you can, so that you start to be able to do almost real trades as a way of working yourself into real investing.
By the way, if you’re starting with no money at all, you have zero money, paper money is free. You can do real world investing, just the same as you would with real money, while you’re saving up to get that first $1,000.
Hey, I started with $1,000 dollars and I turned it into a million dollars. If I can do it, so can you.
If you liked this blog and you want to learn more, learn how to invest with my FREE Digital Introduction to Rule #1 Online course. This course is packed with exercises and videos to teach you what Rule #1 is all about.
Now go play.
If you’d like to see how you stack up against experienced investors, take my Investing IQ Quiz!
Phil Town is an investment advisor, hedge fund manager, 3x NY Times Best-Selling Author, ex-Grand Canyon river guide, and former Lieutenant in the US Army Special Forces. He and his wife, Melissa, share a passion for horses, polo, and eventing. Phil’s goal is to help you learn how to invest and achieve financial independence.