Airline pilots practice fly in simulators before taking off in an expensive new jet. They do this so that they don’t kill themselves or their passengers. They also do this so that a very expensive airplane does not get destroyed!
In the futures markets people who trade commodities have been practicing for years by “paper trading” the markets. Paper trading consists of using long term price charts to get a feel for the markets. This was done before we had computers by learning to recognize and analyze simple trend lines using a pen and ruler in a catalog of price charts supplied by a technical analysis chart subscription service.
Once the computer was invented an observant, entrepreneurial, futures trader named Lan Turner recognized that the entire futures trading process could be simulated with software. He noticed that this could be done just like the Xbox games kids play today that are a lot of fun (but don’t teach you how to get wealthier).
Mr. Turner created a simple software application with a programmer friend and began showing it around. Futures traders immediately recognized the enormous benefit of practicing in these highly leveraged markets before actually trading; just like pilots learning to fly a new aircraft use a simulator. With this first application Lan began hiring more and more programmers and today his company Gecko Software (www.geckosoftware.com) has the best futures trading simulator in the world because it really puts you in the trading seat without exposing your hard earned savings.
Now they have finally created an equity version that is being beta tested called TNT High Finance that allows me to actually practice in any past time in any stock. The software allows me to place positions and then roll time forward like a video player. This virtual environment allows me to see each day unfolding in any stock I want to practice an investment technique in the market without risking my assets.
The reason I am writing about paper trading in the stock markets is that you must understand how vitally important it is for you to find a stock investing technique that is just right for you. Each of us has different ways of thinking (psychology). A stock investing method that is just right for me may be horrible for you and vice versa. Paper trading in the stock market allows you to hone in on a stock investment strategy that works for you. Learn to paper trade in the stock market and you can get years of trading experience in a few short months of practice that is absolutely critical to your financial health!
Author: Dr. Scott Brown, Ph.D.
Article Source: EzineArticles.com
Provided by: PCB Prototype & Manufacturing
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