Posted by forex at 5:33 AM
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1. Choose a website that offers the full range of options for your practice account (see Resources). Make sure it deducts what you would be paying for commissions from your total, conducts real-time trading, and includes the option to short-sell stocks. Short-selling can be lucrative and practicing this skill will be beneficial to you when you transition to a real money account.
2. Setup your account with the parameters with which you would like to work. Most sites allow you to choose the amount of money you would like to have in your trading account. Do you want to practice with the dollar amount that you actually want to invest? Or do you want to see how much money could be made if you invested a much larger amount of money? Since it's practice, the sky is truly the limit.
3. Don't be afraid to use the site's educational material. Straightforward trading is relatively easy, and you can definitely make money, but learning semi-complex strategies such as short-selling and utilizing trailing stops can increase your returns.
4. Begin to research stocks. You may want to go with familiar companies, such as Wal-Mart or Apple, or you may want to sign up for stock trading news letters to give you tips and tricks for choosing just the right stock. Utilizing all of your resources as if you were trading with real money is the best way to practice online trading.
5. Use the symbol lookup tool to find the trading symbols used by the companies you wish to trade, then you can view their recent earnings and buy stocks. Remember that each transaction will include a commission, so you may not want to diversify too much. Start slow, and do not be afraid to sell if the stock seems to be doing badly. On the flip side, do not be afraid to ride it out if your stock starts to fall a bit.