When you start investing in the stock market, you put some of your hard-earned money at risk. If you do not have much investing or trading experience, it would be nice to practice first before putting real money into the market. Fortunately, the Internet provides plenty of resources that allow you to practice picking stocks or trading the market without taking chances and losing money.
Financial Website Practice Portfolios
The bigger financial websites offer free portfolio tracking services that you can use to set up a practice stock portfolio and evaluate the results of your stock picks. Such websites include Yahoo Finance, Google Finance, the "Wall Street Journal" and MarketWatch. These sites require you to join with a personalized log-in, then you can set up and manage one or more practice stock portfolios. These portfolio services are most appropriate if you plan to primarily pick stocks and hold on to them for a while. However, the portfolios will allow you to buy, sell and include the effects of brokerage commissions.
Broker Virtual Accounts
If you want to practice active stock market trading, many online brokers offer virtual trading accounts. With one of these accounts, you are set up with a simulated money balance and can use the broker's trading tools to trade. A virtual account allows you to learn how a brokerage account works, learn how the stock market works and develop your own trading strategy. Broker virtual accounts also let you try out the systems and tools of different brokers, which will help you pick a broker when you are ready to trade with real money.
Games and Contests
Another way to practice stock market investing and get some feedback on your results is to take part in online stock market games and contests. If you want to interact with other people concerning your stock picks and strategies, stock market games allow you to see what others are doing in the market and compare your results. Several financial websites let you start your own game and open it to the public, or else just invite your friends to play.
If the eventual goal of your stock market practice sessions is to invest your own money in the market, make an effort to practice like you are trading with your own money. Trading with a $100,000 virtual account can be fun, but might not be relevant if you plan to start investing with just $5,000. There is potential to generate real profits in the stock market, and using a practice account the way you would if it contained real money can be a way to build the skills you need to earn profits for yourself.
Tim Plaehn has been writing financial, investment and trading articles and blogs since 2007. His work has appeared online at Seeking Alpha, Marketwatch.com and various other websites. Plaehn has a bachelor's degree in mathematics from the U.S. Air Force Academy.