Trading or Investment Idea? Consider Some Simulation

In the late ’90s, at the height of the dot-com bubble, it seemed as if there was a new stock-picking simulation game being launched every week. These simulati reality: Simulated trading to prepare for the real markets
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In the late ’90s, at the height of the dot-com bubble, it seemed as if there was a new stock-picking simulation game being launched every week. These simulations were not so much training exercises as completive events tailor-made for the financial media, who, in their zeal to capitalize on the excitement of a raging bull market, wrote glowing profiles of the winners, often framing them as market geniuses all but guaranteed to make millions in the future.

In reality, most of the winners were never heard from again. Worse yet, for the simulation participants, the outcome was starkly binary—win or walk away with nothing of value. In a game of boom or bust, with a finite simulation period, there was no reward for employing prudent risk management practices or investing conservatively.

It’s not that way anymore. Thanks to simulators, you can now compete in trading simulations where even if you’re not the winner, you’ll gain valuable experience that will help you be more confident when you’re ready to put real money into the market.

Not Your Grandparents’ Stock Market Simulation

Traditionally, stock market simulations have been very basic: choose a stock or portfolio of stocks, and the person who has the best return when the simulation ends, wins. But today, trading simulators like paperMoney, used in the thinkorswim Challenge sponsored by TD Ameritrade, offer simulators to become familiar with the mechanics of trading through hands-on interaction—all without risking a dime.

In such simulation environments, you participate using an interface that simulates the look and feel of a live order entry platform. This allows you to place orders, manage positions, and develop strategies just as you would with real money. And it’s here in this pressure-free environment that you can safely experiment with different styles and approaches to trading.

For example, suppose you’re primarily an equities trader but have always been curious about options. Options are certainly not for everyone, and this could be a great opportunity to explore the dynamics of options trading and how adding options into your portfolio may affect its performance. This can be especially true when it comes to exploring complex options. You may not wish, for example, to put on your first iron condor or other multiple-leg options spread using real money, but in the simulated environment, you can experiment with such trades in order to better understand them.

Have you ever wanted to short a stock but were reluctant to try? You’re not alone; shorting is possibly one of the most intimidating and misunderstood trading strategies—even by those who’ve been active in the market for years. But in a simulated environment, you don’t have to be intimidated.

Value for Everyone

Perhaps the best thing about participating in a fully interactive simulation is that a tremendous amount of educational content can be integrated right into the trading platform. Tutorial videos and demos covering topics like charting, analysis, and technical indicators can help participants develop strategies that they can then test to see how they might perform in the real world.

The bottom line? Whether you’re a novice or an expert, a day trader or a value investor, a technician who relies on indicators or a fundamental investor who focuses only on data, a simulator can be a great tool.

Practice Trading on thinkorswim Without Risking a Dime

Practice analyzing, strategizing, and trading like nobody’s business with paperMoney® on the TD Ameritrade thinkorswim® platform.


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Content intended for educational/informational purposes only. Not investment advice, or a recommendation of any security, strategy, or account type.

Be sure to understand all risks involved with each strategy, including commission costs, before attempting to place any trade. Clients must consider all relevant risk factors, including their own personal financial situations, before trading.

The risk of loss on a short sale is potentially unlimited since there is no limit to the price increase of a security. There is no guarantee the brokerage firm can continue to maintain a short position for an unlimited time period. Your position may be closed out by the firm without regard to your profit or loss.

paperMoney® Trading: This software application is for educational purposes only. Successful virtual trading during one time period does not guarantee successful investing of actual funds during a later time period as market conditions change continuously.

Iron condors, and other multiple-leg option strategies can entail substantial transaction costs, including multiple commissions, which may impact any potential return.  These are advanced option strategies and often involve greater risk, and more complex risk, than basic options trades.


Market volatility, volume, and system availability may delay account access and trade executions.

Past performance of a security or strategy does not guarantee future results or success.

Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Options trading subject to TD Ameritrade review and approval. Please read Characteristics and Risks of Standardized Options before investing in options.

Supporting documentation for any claims, comparisons, statistics, or other technical data will be supplied upon request.

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