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What is Paper Trading and How You Should Learn to Trade Stocks

October 19th, 2012

Education, paper trading and live trading with low shares should be used together to acheive success in the stock market.

What is Paper Trading?

  • Trading stocks with a fake account or with fake money
  • A way to practice before doing live trading

How to Train

  • Get as much education as possible
  • Begin paper trading
  • Do live trading on low shares in order to gain experience (if you have a stock worth $50/share, don't trade more than 5 shares
  • Example: as the stock market goes up, add 1 share (this will cost you commissions, but you will gain experience), and continue adding one share at a time as it goes up.
  • Commissions can cost from $5-$40 per trade. You will be losing money. This business requires your time and money in order to gain education.
  • Put these numbers into an excel spreadsheet and multiply them based on the number of shares you want to trade in the future. See if you're making a healthy profit.
  • If you're┬áconsistently┬ásuccessful and you're trading properly, then begin live trading with larger shares.

Why Live Trading With Low Shares is Essential

  • The problem with paper trading is the trade executions will fill automatically, but they might not in live trading: stocks might be more scarce, trade timing might be off, etc.
  • Your mindset is changed in live trading (anxiety, fear, you're using real money, etc)
  • Many people are successful with paper trading, but not with live trading initially
  • If you go right from paper trading to live trading with larger shares, you're likely to lose a lot of money

Author: Sasha Evdakov

Sasha is the creator of the Tradersfly and Rise2Learn. He focuses on high-level education speaking at events, writing books, and publishing video courses on business development, internet marketing, finance, and personal growth.

I'm Sasha, an educational entrepreneur and a stock trader. In addition to running my own online businesses, I also enjoy trading stocks and helping the individual investor understand the stock market. Let me share with you some techniques & concepts that I used over the last 10+ years to give you that edge in the market. Learn More

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This website and content is for information purposes only as Rise2Learn, TradersFly, and Sasha Evdakov are NOT registered as a securities broker-dealer nor an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Rise2Learn, TradersFly, and Sasha Evdakov cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Rise2Learn, TradersFly, and Sasha Evdakov in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Rise2Learn, TradersFly, and Sasha Evdakov accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.