Are you a little frightened of the investment market? Have you heard about paper trading and want to know if you can try that before diving right in? Unfortunately, most online consumer trading platforms no longer offer paper trading per se, but better alternatives exist.
Paper trading is a more common activity in large institutional settings. In the Forex or CFD industry, paper trading before the internet was a way that investors learned to invest without losing large amounts of money. Investors would write out their investment ideas on paper and then follow the market to see if the idea worked, hence the name “paper trading.” Some larger trading companies offer a demo mode for newbies to learn without investing money, but they don’t win anything.
Some trading platforms offer a demo mode where you can learn. You invest fake money and get statistics of what you would have gained had you invested. While this is nice, it isn’t anything to write home about.
Another option that we like better is a promotion offered by Tastyworks. This trading brokerage has many features; however, they also have a promotion called “Trade Challenge.” It isn’t paper trading, but you can invest without using your own money, and you aren’t liable for any losses you might experience, up to a certain amount. Of course, if you choose stocks wisely and make gains, Tastyworks lets you keep up to $250 profit from your gains. The only downside to the Tastyworks promotion is that it doesn’t give you unlimited free trading. It only gives you a few days to perform your magic. After that, you’ll have to put up your own money and pay any trading fees.
First, you need to sign up for an account. You also need to fund the account with $2,000. Don’t worry, though. In the paper trading mode, your funds are not used or touched in any way. The company just wants to ensure you are interested in using their services. Again, your funds are not affected when you use this new paper-trading mode.
Once you fund your account, contact Tastyworks customer service through their contact link. Let them know you want to do the “Trader Challenge,” as they call their paper trading mode. They will send you an access link and welcome you to the two-day challenge.
Sure, you can start trading and try to learn as you go, or you can create a defined trading plan where you don’t use your money but use the bonus trade that Tastyworks gives you.
By implementing a good trading plan, you’ll have a clear-cut idea of how you will enter and exit these trades so you can earn that extra $250. Making a plan is a calculated trade and gives a better chance of coming out on top than having that “hold and hope” mentality that causes many traders to lose money.
Without a plan, you are gambling your paper trade money away. You might make a win here and there, but your progress won’t be strong. Set your entry and exit plans and outline when you will enter a trade and exit. Remember, you want to manage the risk and limit your losses. The less money you lose, the longer you can trade. Think about the amount of Tastyworks free portfolio you want to trade. Good traders don’t risk more than 1% to 2% of their money. Of course, you must take this advice with a grain of salt as you aren’t investing your own money and only have two days to make a profit.
To have a better chance of winning, you can decide to risk less and nail down the process before you blow through it all. Remember to do your research, and look for the big gainers. Study your potential investments and research the possible downfalls. Be diligent! Research can give you a better chance of making a good investment.
Make a specific entry and exit trade. Decide when you will enter a trade and only enter when you see the signal. The exit is just as important, so be sure you’ve covered it before using the Trader Challenge at Tastyworks.
Our recommendation would be to activate the Trader Challenge during earnings season. You only have two days to work on this challenge and earn a $250 bonus. If you see a profit on that first day, make your trades on the first night’s earnings, and do the same thing the next day until you get your $250 profit.
Of course, there are terms and conditions to the challenge. No trading company could let you trade to your heart’s content. Read through the terms and conditions of the challenge to learn more about the rules for the challenge.
In general terms, the rules are that you can open an account with Tastyworks providing you aren’t an employee of the company. You also want to look at the small print. Apparently, they can take back the winnings if you close your account or try to withdraw your initial $2000 deposit within 180 days of having opened the account. So you must keep your deposit there for at least six months.
Sure. You can do paper trading or any other simulation with other companies. But we consider Tastyworks easy to use and one of the best trading platforms. The platform is intuitive and has some helpful features, like investment tips. This feature comes in handy for those times when you are just BLOCKED. The team at Tastyworks can help get those ideas flowing again.
There is also an interesting Follow Feed that lets you keep your favorite trades front and center. You can continually see what they are doing. In addition, you can watch real trades take place a minute by minute, giving you a better picture of the overall market.
OK, so if you still aren’t convinced, there are a few alternatives. You can try ThinkorSwim by TD Ameritrade. Just be aware that ThinkorSwim has higher trading fees, and the website is a bit busy. There is another company called Interactive Brokers, but they have higher requirements. For example, you have to be 21 to trade, and if you are inactive for a long time, you will get slammed with an inactivity fee of $10 to $20.
Sorry! Aside from the Trader Challenge, there is no long-term demo option. The other companies don’t offer a demo version either. You’ll need to research to find a company that offers a demo account when you sign up.