Paper trading is a stock market term & it also comes from the stock exchange market itself, where investors who wants to practice would write their investments on paper and follow the market movements. Thinkorswim is a great platform to try paper trading. If you are a beginner in trading then you should know the actual meaning of paper trading. What is paper trading? what is the advantage & disadvantage of paper trading? We will learn all about paper trading in this article so let’s directly jump to the main topic of paper trading.
Thinkorswim Paper Trading Complete Information:
What is paper trading?
Every trading platform attracts many new customers every day. One of the most common thing which is mostly seen in new traders is hesitation to put their real money at stake. Even if they have full knowledge of how trading works but if they have never done it practically then still the risk is always there. What is the best way to overcome this fear? In this condition, paper trading comes to help you to learn how trading works in a virtual way. Paper trading is completely free way to learn the trading skill without putting their real money at stake. It gives investors a great chance to test their strategy and improve their skill. It also a great tool for new investors to adapt themselves on the thinkorswim platform. Thinkorswim offers paperMoney account funded with $100,000 of virtual money which you can use to practice trading.
Advantage of paper trading:
- As I said it is completely risk-free trading which helps a first time trader to learn how trading works in real time. They can practice more & more until they are confident about their trading skill. It is also used by professional traders who want to try some new strategy, learning about the market & learning about themselves as a trader.
- Using a paper trading account is similar to using a real account and putting real money at risk. It is just a virtual way of trading and everything remains the same. Even if you lose you won’t lose your real money & even if you win you won’t get any money. It is just a way to adapt yourself in the trading world and learn new skills. When you’ve gained enough knowledge about trading then you can use these skills on your real account.
Disadvantage of paper trading:
- When people are performing paper trading they don’t take it too seriously because there is no real money is being used. In excitement, they expand their profit by taking a big risk which they won’t have done with their real money. In case of money loss, they don’t take it very seriously since it’s not real money that’s being lost.
- Another big disadvantage of paper trading is traders don’t always follow the market and respond as they would if it was real money.
Should you use paper trading?
Of course yes, you should use paper trading as much as you want till you are confident enough to put your real money at risk. It will help you to build trading skills & also teaches you how to control your emotions whether it’s a profit or loss. In the end, you will be capable enough to overcome your emotions on any profit or loss so that it will not negatively affect your trading psychology.
So it was all about thinkorswim paper trading or paperMoney which is a free tool offered by TD Ameritrade. If you are not familiar with thinkorswim then must read our first article on thinkorswim there you also get download link of this trading software. I would suggest all of you to use this platform for your trading purpose because it is completely free to use. If still, you have any doubt in your mind regarding this thinkorswim paper trading article then please comment below.