So you've got your finances in order, and after paying for living expenses, insurance, and funding your emergency fund, you find you have some money left over to invest. Great! Now you're itching to get your account opened so that you can place your first trades and make tons of cash! Well, before you do that, it's probably a good idea to do some practice trades. There are plenty of stock simulator sites out there for you to get your feet wet.
While you probably have an idea of what you want to buy, you may not be familiar with the types of orders you can enter, or how to enter the order at all. Having a trial run of this using play money will save you from the frustration and embarrassment of entering an incorrect trade with your real money. Market orders and Limit orders will probably be your most common order types, so try entering a few on a simulator. If you have enough time (a few months at least), try joining a game and see how you do.
If you're going to make mistakes while you learn how to enter orders, better to do it with fake cash!
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Great advice for the first time investor also starting small while learning as you go.
ReplyDeleteIt's totally worth using a free stock simulator to get some practice. Small investors using a big bank brokerage will probably be paying about $30 per trade. You definitely want to get to know the difference between buy, sell, market, limit, and stop orders before you get started. Making a mistake, reversing it, and then entering the correct trade would cost $90 in that case!
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