The stock market can be a scarily confusing place for newcomers, especially if they don’t have any knowledge about finance or investment in stocks.
They say trial and error is the best way to learn the ropes of stock trading, but when the stakes involve one’s savings, not many are willing to take the risk.
You can learn using a stock market simulation app, but is it worth it? Here we talk about these apps in detail and list their pros and cons to give you an idea of whether they are worth your time or not?
We also list down their pros and cons so you can make a well-informed decision.
- 1 What is the Function of a Stock Market Simulator App?
- 2 Are Stock Market Simulation Apps Good For Practice?
- 3 Disadvantages of a Stock Market Simulation App
- 4 Are They Worth It?
- 5 5 Best Stock Market Simulation Apps
What is the Function of a Stock Market Simulator App?
A stock market simulator app is a virtual trading platform that mimics the operation of the actual stock market.
You invest hypothetical money in a hypothetical company and watch how the rates fluctuate. You get to experience how the market operates without the risk of losing your hard-earned money.
Are Stock Market Simulation Apps Good For Practice?
These apps are an excellent way to get acquainted with how the market works. By the end of the first day, you will, at the very least, know how to navigate through the market.
In fact, you may even be able to earn thousands of dollars within a few days, hypothetically, of course. Even though the app is just a simulation and not the actual market, it does have a few benefits.
Test Your Skill or Luck
You can find out where you stand in terms of your knowledge about the stock market. Many newcomers that start trading generate thousands of dollars with minimal investment in the first go.
They then raise the stakes motivated by such promising results only to find out that they had only gotten lucky and still don’t know how the market operates.
Beginner’s luck can only serve you well in the beginning, and it is your skill that will get you long-lasting results. A stimulator app can help you polish your skill so you can get promising results when you begin trading in the real world.
See the Risks
Here you can also witness real-life like fluctuations, try out new strategies and assess the risks of each. The simulated stock market is for you to make bad decisions and learn from them without having to worry about losing your money.
If you are using the simulator app, make sure you try out all-new strategies to see how they perform on multiple occasions.
As long as you are actively trying to learn and understand the risks, you will continue to improve and grow. This app is all about giving you a risk-free trial for what it is like to trade in the actual stock market.
Learn More about the Flow
There are various factors that govern how the stock market operates, and the flow of investment is one of them. Building an understanding of the correlation between stocks and flow is crucial to one’s performance and to the success of your investments.
You will have to build an understanding of the current flow, and often, that means reading past performance and trends to make investment decisions.
The stock market simulator app is the perfect place to start. Pretend as if you are actually investing money in actual stocks and make investment decisions seriously.
Analyze the results and try to make tweaks to your investment strategy by building an understanding of the flow and other investment factors for the best results.
Disadvantages of a Stock Market Simulation App
Every new development has its pros and cons, and here are some of the stock market simulator app.
It is not the real thing
We’ll start by stating the obvious. It’s a simulation and thus can only teach you so much about how to deal with real-time market fluctuations.
Software, no matter how extensively designed and well-programmed, fails to capture the essence of the real market. When you begin trading, you will have to keep track of multiple factors that will affect the profitability of your investments.
May Inculcate Passive Trading Behavior
This is perhaps one of the biggest drawbacks of simulated apps. The lack of fear of losing money makes one passive and often ignorant.
A person may also end up playing a little too safe and consider minimal profits as something to be celebrated. Trading in the stock market is all about taking risks and either watching them pay off or working towards minimizing losses.
We’ve said this before, and we’ll say it again, that it is not the real thing. Whatever results you achieve are unrealistic.
In fact, they may make a person overconfident, and they may end up incurring heavy losses because of a lack of caution.
Are They Worth It?
Despite us repeatedly pointing out that they are not the real thing, we’d say they are definitely worth it. The fact that they aren’t the real thing is their selling point.
You don’t have to worry about losing all your investment or saving when testing the water. You can take your time and get a basic understanding of how the stock market works.
It also helps you develop a few strategies that you can test when you step into the real stock market.
As long as you make sure to take the simulator app as a learning platform and use it to build an understanding of how the stock market works and what are the factors that affect profitability, it can be very beneficial for you.
Here are some of the best stock market simulator apps that you can use to develop an understanding of how the market works and slowly learn the ropes to eventually becoming an expert.
5 Best Stock Market Simulation Apps
The best way to learn is to actually practice trading, and these platforms can help you get as close to the real trading experience as possible.
Bear Bull Traders Simulator
From classes for beginners to advanced traders, the bear bull traders simulator offers it all.
The platform provides real-time trading experience allowing you to learn new strategies. You also get the option to customize your user experience to suit your preference to make the learning process more comfortable.
The best part about this app is that it also allows you to go live when you want to step into the real stock market. You don’t need to relearn on a new application and can continue to use the one you learned trading on.
Thinkorswim by TD Ameritrade
Here too, you can customize your trading experience to choose whether you want information for the top gaining commodities or find out which ones are losing.
You don’t even need a brokerage account to access and use the application and can register with your email. You can use the simulator to get acquainted with some of the most advanced trading tools available in the real stock market. It allows you to develop and polish your strategies and skills.
With Warrior Trading, you can take your learning experience to the next level. Every beginner gets a virtual balance of $200,000 that they use to make investments.
They also get access to various performance measuring tools to keep track of where the investment is going and how well it performs.
In fact, here, you see how your investment would have performed in the real market. The platform mirrors the exact happenings of the stock market, and the currency you use to trade is the only simulated bit in the entire system.
This is the application to use if you want to gain real-life trading experience without the risk of losing your money. Do keep in mind that warrior trading is not free, and you will have to pay a monthly fee.
TradeStation is another paid simulator, but it is also one of the more renowned ones. It also doubles as an active trading platform and thus accurately mirrors stock market conditions on its simulator.
The simulator comes with a complete set of research and monitoring tools, as well as access to community forums and stock chart indicators. This is the simulator to use if you want a smooth transition into the real trading world.
NinjaTrader Free Trading Simulator
The Ninja Trading Simulator is free to use as long as you create an account on the app. The creators want beginners to gain real-time experience. Thus the simulator recreates real-life situations, and learners get access to all sorts of research and trading tools.
One very attractive feature of the simulator is the ability to go back in time and place a different bet to see how that would have worked out for you.
The stock market simulation app offers access to various learning tools and allows users to not only learn from their mistakes but also find solutions to refine their strategy.