Practice Stock Trading Does Not Prepare You For Real Money Trades

There is a major difference between clicking the mouse and buying ten thousand shares of IBM with a virtual money account, and clicking that same mouse to buy stock with your own hard earned money.  Trading in the stock market is an exercise in discipline, there are many things that people consider before actually putting their money into a company.  Almost everyone has the same goal when trading stocks, and that goal is simply to make money.  Whether you are a day trader or a long term stock investor, that goal remains the same.  The idea of making money by having money is an attractive thought to most people, but for day traders it is a way of life.  To become profitable trading stocks you have to develop that skill.  What better way to develop a skill than to practice, right?  It’s not quite that simple.

There is no substitute for the real thing when it comes to trading stocks.  If you have ever used a practice stock trading account, then I’m sure you’ve made trades that you would never make if your own money is on the line.  The reason you can’t replicate the results you may have seen in your paper money account is a psychological one.  It is human nature to become attached to your possessions, and that includes your money.  For most people it is almost like a game when they are trading on an account with play money.  The thought process behind buying and selling stocks is just different.  The simple reason for this is that trading with your own money has consequences.  There are many techniques to make your practice stock trading more beneficial, but just be aware of the differences between virtual money and your own.  If you want to learn to trade stocks, you need to treat your practice more like the real thing.

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1. Breaking Into the Stock Market
2. The Federal Deposit Insurance Corporation – The Guardian of Your Money