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Anyone know where to paper trade?
Old 08-13-2005, 11:35 AM   #1
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Anyone know where to paper trade?

Hi all, I was wondering if anyone knew a place that allowed you to paper trade stocks and options. I'd like to play around with some ideas before actually commiting real capital.

I have so far found http://www.stocktrak.com/ but its like 25$ for 3 months, and I'd prefer more time and less money

I'd like a year to be honest, as I have that much faith in myself. Especially on the options side...

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Re: Anyone know where to paper trade?
Old 08-13-2005, 11:44 PM   #2
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Re: Anyone know where to paper trade?

Quote:
Originally Posted by Olav23
Hi all, I was wondering if anyone knew a place that allowed you to paper trade stocks and options.
Microsoft Excel
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Re: Anyone know where to paper trade?
Old 08-14-2005, 12:09 AM   #3
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Re: Anyone know where to paper trade?

I was thinking the same thing, but its hard to simulate things in excel like options expirations, early exercise, slippage and such, especially when you are new to the world of options in general...
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Re: Anyone know where to paper trade?
Old 08-14-2005, 01:20 PM   #4
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Re: Anyone know where to paper trade?

If you're interested in day trading, some brokers will let you paper trade an account by logging on in Demo mode rather than real mode.* Cybertrader will allow this and I wouldn't be surprised if Schwab would too.* Execution is real time, although "slipage" is less than in real mode.* The practice is quite enlightening.* It becomes painfully obvious that if you can't profit in demo mode, you'll never make it in real mode.* It also becomes obvious that your blood pressure doesn't shoot up in demo mode like it does in real mode.*

If http://www.stocktrak.com does what your after for 25$ for 3 months, a years worth of testing your system(s) would total $100 . . . pretty small change in the world of stocks and options.* *
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Re: Anyone know where to paper trade?
Old 08-15-2005, 09:27 AM   #5
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Re: Anyone know where to paper trade?

Quote:
Originally Posted by Olav23
I'd like to play around with some ideas before actually commiting real capital.
Paper-trading options is like playing paintball-- neither one gives you the experience it takes to survive the real thing. Even worse, it probably gives you a sense of false confidence. You think you understand the risks but you don't really have to pay the penalties, and your adrenal glands never really respond to paper trades like they do to the real thing.

In fact, paper trading is probably worse because after you reap the benefits of the real-world experience you'll probably still be alive and have to recover from the debt...

Here's a little thought experiment. Let's say that you're a value investor in the best Graham style, a fundamentalist who knows his way around financial reports & spreadsheets, you've survived volatility of 40%, and you've spent a two-decade working career learning how to recover from the stress of scaring yourself to death. Armed with this background & experience, you decide that shorting stocks is just value investing in reverse-- sell high, buy low. You read up on the subject, short a few stocks, and start feeling confident. Your keen research identifies that KMart is horribly overvalued at $77 so you short it. Over the next two months the rest of the world stubbornly refuses to recognize your prescience and it rises to $90, but you're familiar with this phenomenon and you stay the course. Maybe you even short more.

One morning you wake up and find that KMart is buying Sears and the KMart shares are trading at $118 with significant upward momentum.

How do you feel? What do you do now?

Try Marcel Link's "High Probability Trading" for the stories of guys who paper-traded in the manner you're considering, learned everything they thought there was to know, and then were quickly relieved of their asse(t)s.
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Re: Anyone know where to paper trade?
Old 08-15-2005, 10:03 PM   #6
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Re: Anyone know where to paper trade?

Thanks for the comments, info. I'll admit that its probably less than ideal, but its better then being surprised by details you didn't understand...

Anyways, i found a place thats free to trade stocks and options:

http://simulator.investopedia.com/Trade/TradeStock.aspx

If anyone else is interested.
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