Investing is a lot like building a fantasy sports team: You assess your game plan, do your research, and make changes as needed. And if you’d like to practice in a “fantasy” stock market, consider the paperMoney® trade simulator by TD Ameritrade.
Certain aspects of fantasy sports leagues and the March basketball brackets can be applied to investing strategy
The paperMoney® stock trading simulator on thinkorswim® can help you practice your strategy without risking actual money
It’s that “game on” time of year again. College basketball tournament pools, rotisserie baseball leagues, and other forms of fantasy sports and sports betting are multibillion-dollar industries, as well as the source of much camaraderie, emotion, and fun.
Sports betting and investing and trading strategies share a few common denominators—money being a big one—as well as key differences in terms of objectives, risks, and other factors. What’s considered “winning” in one field may mean something else in the other. Hoops dreamers preparing for the annual ritual of agonizing over their brackets can channel similar principles and passions into an investing and trading strategy. Non-sports fans can do it too.
The paperMoney stock trading simulator on the thinkorswim platform is a good place to practice—consider it a “fantasy” stock market where you’re your own general manager and head coach. Got game? First, let’s walk through a few pointers, just in time for the madness.
Real coaches have very tough jobs, are under immense pressure, and have to make rapid-fire, rational decisions in every game. As an individual investor, you’re not in that sort of position. But as head coach of your portfolio, it’s important to be similarly alert and engaged. Review your lineup and its performance often—at least every quarter.
How well do you know your team? Whether you’re considering equities, bonds, ETFs, futures, or any other investing category, do your homework. Study all the public information you can get your hands on, such as quarterly financial reports (available through thinkorswim) or investor prospectuses. For a publicly traded stock, listen to the company’s most recent quarterly earnings call and try to gauge how executives assess their business outlook. Watch how the stock price moves after earnings releases and other news to get a sense of market sentiment.
Whether you’re identifying players or investments, passing the eye test is important. But investors should also dig deeper into the numbers. Analyze the data, including fundamentals like earnings per share and cash flow, to get a sense of how a stock compares to its competitors. Call up a daily price chart and apply technical analysis tools such as moving averages, which can offer valuable context.
Branch Rickey knew what he was talking about. “Trade a player a year too early rather than a year too late,” was one particularly incisive quote attributed to the legendary former baseball executive. For investors, this means setting aside any emotional attachments and being ready to say “no” or “goodbye” to a trade at the right time. Maybe an investment you made has performed well or exceeded your expectations in recent years. That doesn’t mean it will continue to do so. Also, watch for anything that seems too good to be true. The numbers have to support any investing decisions. You’re running a portfolio, not a charity.
Does practice make perfect? We’ll leave that question to the folks in the post-game interview room. For investors and traders, you’re aiming for profits, and experience counts. The paperMoney stock trading simulator offers a virtual trading experience to test your strategies in an “empty gym,” just like you would in a real, live situation, but without risking real money on an actual exchange.
With paperMoney, you gain a handy tool to hone your skills, especially if you:
Most of us can’t sit at a trading desk all day long, so mobility matters. Just like the live thinkorswim platform, the paperMoney stock market simulator goes with you anywhere via the TD Ameritrade Mobile Trader app. You can use it to practice managing trades on the go just as you would with live trading.
Ready to ditch the dugout and take the field? Let’s play.
Practice analyzing, strategizing, and trading like nobody’s business with paperMoney® on the TD Ameritrade thinkorswim® platform.
Bruce Blythe is not a representative of TD Ameritrade, Inc. The material, views, and opinions expressed in this article are solely those of the author and may not be reflective of those held by TD Ameritrade, Inc.
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Content intended for educational/informational purposes only. Not investment advice, or a recommendation of any security, strategy, or account type.
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