How to Use a Paper Portfolio to Practice Stock Trading Risk-Free!
Hey Bow Tie Nation, Joseph Hogue here with the Let’s Talk Money channel and one of the most highly requested videos…how to practice stock trading using a stock simulator without putting real money at risk.
Those of you in the nation know I’ve been using the Webull app for just over a year now and one feature in particular drew me to the app, the paper trading simulator.
If you’ve ever thought about stock trading or are just starting out investing in stocks, I highly recommend you start here. With the free stock simulator, you get a million dollars in paper trading to invest and test out your strategies before you commit real money.
So I’ve talked about the simulator a few times but have never done a video on how I use it to test stocks I want to buy or different trading strategies. I’ve gotten a lot of requests so for this video, I’ll show you how to use the paper trading simulator on Webull, how to follow stocks you’re thinking of buying and how to use some of these other features to make sure you’re making the right trades.
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Test Your Stock Ideas Out First with a Stock Simulator
Nation, maybe it’s just me but the worst feeling in the world is jumping into a stock trade or an investing strategy at the wrong time. Right? Maybe you follow the shares or you hear some advice on the stock, you jump in to buy and almost immediately you start losing money.
It almost feels like the market is rigged against you.
And that’s why I love stock simulators like the one on Webull or I know there’s one on Investopedia and ThinkorSwim. I use Webull because it’s got a lot of the other features I need for stock trading and, if you use the link I’ll put below, you’ll get two free shares of stock when you open an account an make your first deposit.
What is a Paper Portfolio?
The paper trading feature itself is super easy to use. If we go into the Webull app and click on Menu in the lower-right, you’ll see paper trading just above Advanced Quotes.
When we open the stock simulator, you’ll see the Reset on the right which will clear out our positions and start us over with a million dollars or whatever you want to set.
I don’t want to reset mine because I’m still tracking a few stock trades. You can see the account value at the top here along with the percentage gain. Below that you’ll see how much buying power you have for paper trading and the day’s profit and loss.
Another reason I like Webull’s stock trading simulator is if we click on Performance here in the menu, we can see the profit-loss for the account as well as for each stock along with these charts.
How to Practice Trading with the Webull App
But to use the stock simulator, it’s really easy, just click on Trade in the Menu here and enter the stock symbol, let’s check out Nikola, ticker NKLA, the $11 billion electric vehicle that has given up a lot of its gains this year and I want to follow for a rebound.
On any ticker in the app, you’re going to find a lot of great information for stock traders. We first see this charting with the moving averages and MACD lines, and you can click here in the upper-right to customize the chart, adding Bollinger Bands, RSI and lots of other technical trading indicators.
Scroll down a little and see order flow and large orders and most of this might be like a foreign language but this is the info you need if you’re going to be stock trading.
Another feature to check out is the Analysis up here in the top menu for any stock, here you’ll find the analyst ratings on the stock and price targets. Scroll down a little and you find support and resistance for trading and short interest for betting on that short squeeze if the shares spike.
If you’re ready to start following the stock, just click Paper Trading at the bottom. That’s going to take you to a trading screen that’s almost exactly like the regular stock trading screen except any orders you place are going to be in that paper portfolio.
You see how much Buying Power you have at the bottom and I can enter a regular market order or a limit order to buy the shares. I want to show you what this looks like so I’ll just do a market order here, put in the number of shares I want to buy and click Paper Trade.
Now if I wanted to try out a strategy, maybe I’d put in a limit order for a certain price and change the trade to Good-til-Cancelled which would keep that order in place until the stock hits that price.
But since it was a market order, that trade goes through immediately and I can go back to my stock simulator and see that it’s been added to my positions and from here, the app will track my profit and loss on it.
A few of the other features on Webull that you’ll want to use, especially for stock trading. First here, if you click over to markets then you can see all the earnings reports coming up. You see each company, when it’s scheduled to report earnings and the analyst estimate. In here you can also see upcoming dividend payments and splits so some great information for timing and trading stocks.
The IPO center is another good resource, showing all the upcoming, filed and listed IPOs of new stocks along with the offer price for shares.
Beyond that, just a lot of useful information from net inflows to give you a sense of stock market direction. The app shows you top gainers and losers over different periods up to a year. You also see most active stocks and a snapshot of the best-performing industries.
Even if you’re not planning on stock trading, there’s a lot of really solid information here for investing and picking stocks. With that stock simulator, you can practice stock trading by following a few stocks before you buy to see if they reach key momentum levels. You can test out your seasonal strategies and other technical events, just an overall great resource.