III. Making a Paper Money Account

Now that you have picked a platform that best suits your needs (hopefully one with a paper money account option) , I highly recommend creating a paper money account on the platform. A lot of people go right into trading their hard earned money, and from experience that will lead you to making quite a few easily avoidable mistakes i.e clicking the wrong button or not understanding a specific buy/sell parameter. If your platform doesn’t have a paper money account option , ThinkorSwim100% does and will also provide some tools to just know in your future endeavors

• Familiarizing yourself with tools and execution without any risk
  

  • Get to know how the trade platform works whether it is buying or selling or practicing your charting. It is inevitable to misclick or not fully understand a buy/sell option when you first start. A fake money account lets you get reps in without having to pay the price for such mistake

• Create testing trading strategy
  

  • We all have ideas that we think are great. Well a fake money account lets you test this theory for free. You will know what is working in your strategy or redevlop and fine tune if it is not working. It will also just give you a chance to test products/charting

• Set account size, milestones, and end goal
  

  • Set your account size to what you expect your real money account will be (see next section on how to pick the size)

  • Set specific milestones on your trades whether it is not having a losing week, making a certain amount of trades a day, a specific loss/win ration, or an overall PnL. When you reach this goal it might be time to get into your real deal trading account

• Continue use for testing future trades
  

  • Keep using your paper money account to test future trading ideas. It will keep a realized PnL and you can download your data to track how well your idea worked. Avoid experimenting with real money at first by back testing on your fake money account *Back testing- essentially running your trade idea through historic data

As always this is a basic concept and something I think is great for all people to use before deciding if trading is right for them. People jump into trading with real money way too early without understanding not only the basic trading principles, but even the tools or benefits of their trading platform. Feel free to message me with any questions on this topic.