Brainy's Share Market Toolbox Brainy's
Share Market Toolbox

Paper Trading

The process whereby you simulate share trading / investing
so you can practise without risking real money.

How can anyone get a feel for share trading without risking real money?
What are the different ways we can do it?
And have fun at the same time?

It is possible to simulate the real world of share market trading or investing without risking real money.
There are a number of ways we can do this.
One way is to participate in a share trading game.
Read on...
 

Why paper trade?

There are a number of reasons to do this. Briefly:
  • Many people who rush into share market investing lose money. By practising first, this situation can be improved.
  • It is possible to have many consecutive losses. It is important to realise this, and to experience it (in a controlled no-loss environment), and to be able to cope with it psychologically.
  • It is important to get a good feel for the concepts of cutting losses early, and to practise it.
  • Novices in the market will gain good emotional experience by pulling the trigger themselves.
  • It is an opportunity to test out a trading strategy in a realistic environment without committing or risking any real money.
  • Many people don't realise how much brokerage costs can impact on potential profits. A good trading simulator will demonstrate this.
In summary, it is a fantastic way to gain close-to-realistic experience with share trading, and to test your intended trading strategies.

This question is answered in more detail the first page of Brainy's eBook (PDF) Article, ST-3100, "Trading practise - Back Testing and Paper Trading".
Toolbox Members can see more details in the full Article here.
(Non-Members can see the "Page 1" of all Articles
from the Table of Contents page.)

ASX Share Market Game

For a number of years now, the ASX has been running a share market trading game twice each year, with costs and advertising sponsored by a corporate sponsor (mostly one of the large banks). There are normally two games offered concurrently - one for school students, and one for the public.

There are usually two games in each year, running for about 16 weeks - one from about February to June, and one from about July to November.
 
To play the game, you need to do three things:
  1. Sign-up on the ASX web site, and create your MyASX login-id. This is free, with no obligations, and no spam. MyASX is a collection of free sharemarket services including:- online classes, personal watchlists, and more.
  2. Pre-registration - Express an interest in playing the game, so that they will notify you when registration is open.
  3. Register to play the game - within the 2-week period just prior to the game starting.

ASX Sharemarket Game - how it works - brief overview

  1. Brief introductory information about the game is here..., including information about any prize pool (usually $5,000 cash prize for the winner, plus more).
  2. Create your MyASX login-id.
  3. Pre-register to play the game before the next game starts - they will send you an email reminder when registration.
  4. Register during the registration period.
  5. The game is based on a number of companies (recently, 150 companies) on the Australian market.
  6. Each player is allocated $50,000 of fantasy money.
  7. There are a number of game rules regarding position size, and other limitations.
  8. Place buy and sell orders at any time of the day.
  9. Your orders are executed in line with the market and will match real orders in the market. If a stock does not trade, or trades thinly, this is reflected in your trading history.
  10. Read the latest Game Newsletter for game information, and occasional tips and hints.

ASX Sharemarket Game - some tips

If you want to play the ASX Sharemarket game, then here are some tips to help you succeed: 
  1. The trend is your friend. If you invest before a trend is confirmed, on the "hope" that a trend is imminent, then you are gambling.
     
  2. Set a Stop Loss for every position held, and if the stop level is hit, then sell without question - do not hesitate! In the game we can't actually place a conditional sell order, so we need to know what our stop loss level is, and watch our stocks every day.
     
  3. How to do all this? - Prepare a price chart. Make notes on the chart (the reasons why you want to buy the stock). Note the Stop Loss level at which you would sell if the price falls. After the buy is made, note the actual buy price on the chart.

Other paper trading options

The following list of additional methods and options is not currently recommended; but is offered here for exploration opportunities:
NOTE: These are not recommended.
Share Market Terminology
 
See Brainy's eBook Articles, and the Master Index list for details.
 
Or, search the eBook Articles.
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The information presented herein represents the opinions of the web page content owner, and
are not recommendations or endorsements of any product, method, strategy, etc.
For financial advice, a professional and licensed financial advisor should be engaged.

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Last revised: 17 July 2021