I want to try and start building my own stock porfolio but I don’t really have the free cash to do it for real so I wanted to know whats a good site where I can simulate trading in actual equities (looking at European/UK and American ones primarily) with actual market data being used (i.e its like everything is real but its not with actual money).
I don’t mind paying a small fee for access to a good site. Looking more at value investing/long term, not day trading or looking in detail at technical analysis.
when i was in undergrad we did this and it was a contest. i think it was called stocktrak or something like that. pretty cool because you can do it with a bunch of people and compare performance; however, not the best layout or market feeds if i remember correctly.
I know optionshouse has a virtual protfolio setting as well that is more practical with data and looks much sleeker and you can play with options strategies. i’d say thats the best bet i’ve seen for what you want to do.
Investopedia has a stock simulator that many people use.
Try MarketWatch, it had the best simulator games/tools for the US markets.
Interactive Brokers has both a demo and paper trading accounts, as does (I believe) ThinkOrSwim.
One issue, however. If you are planning to do value investing, which - if done well - is generally a good investment approach, you are likely not going to be trading much. It may take a long time for the benefits to show up in a paper trading record. By that time you may be ready to put real money on things.
Nothing wrong with getting started by paper trading, just be prepared for that.
Also, there are emotional consequences to trading with real money, particularly if you are losing. Being able to remain disciplined in the face of fear and greed is a big part of investing. Some people believe that paper traded results are worthless. I don’t believe they are, but I do think they do not measure one’s emotional constitution in the face of gains and losses.
At the same time, there’s value in learning how to enter your trades propery and exit them, and there are lots of little things that can go wrong when you’re just getting started, so it’s better to lose paper money over real money when you are learning that stuff.
optionshouse has a nice virtual account set up
You really need to think through the expenses of trading before trying to do it. If you’re buying stocks, then you have to pay like $7-10 per trade. That means that if you buy $1000 of stock, then you need it to go up 1% to even make any money. This means that if you make lots of trades, you will inevitably lose money on a small account.
The three obvious ways around this are to find a service that charges commission on a per share basis (such as Interactive Brokers, though I can’t use them because my work won’t let me), to just trade less (value investing perhaps like Bchad says), or to lever up a bunch (this is basically what small trading shops do, in combination with a keen focus on commission costs).
Another option is that some places (such as Fidelity) allow free ETF trading on some ETFs. However, you have to hold them for 30 days (for Fidelity’s at least) so that precludes any short-term trading.
My advice is to find some amount you want to keep in your banking account and then any time it goes over that amount by about 10%-20% (after accounting for any nearby rent payments), transfer the difference into your brokerage account. If you do it regularly, then it will gradually get up pretty high. You can start with ETFs or mutual funds, and then when you have more money you can begin to do stocks, if that’s your thing.
One other thing: as I’ve been using the above approach, I’ve been steadily increasing my 401k contribution so as to limit the amount that I need to transfer to my taxable brokerage account. It’s a balancing act, but ideally you should try to maximize your tax-deferred investments.