Virtual Stock Trading Can Teach Investors How the Market Works

Everyone knows that there is a lot of money to be made in the stock market, but there is also a lot of money to be lost there as well. Wouldn't it be nice if you could practice trading stocks before you ever put your money on the line? That way you could try different trading strategies without being hindered by the fear of losing everything. By the time you started really buying and selling stocks, you would already have a great deal of valuable trading experience.

Thankfully, there are a number of websites that offer "virtual trading accounts" for interested investors to use to teach themselves how the market works. These websites vary widely in terms of their purpose, which affects how they allow you to participate in "virtual trading". Whatever their differences, however, they all offer a safer trading environment for the rookie investor than the "real" market does.

Some websites, like "stocksquest.com" are designed for use by educational institutions. Although individuals may sign up for accounts, the website is really designed to teach investing in college and high school classrooms. Stocksquest allows teachers to set up competitions for their students in which they can control how much "money" the students have to invest as well rules concerning how and when they can trade.

The fact that it is designed for educational purposes works against it too, however. Because day trading is frowned upon by many investment professionals, the website does not allow you to "sell" a stock the same day you "buy" it. This means that sometimes you are forced to hold on to stocks longer than you wish because there is no way to change this rule. Thus, Stocksquest is even less encouraging of active trading than the SEC is. At least the SEC will let you do three day trades in a five day period.