Can stock trading games help improve your portfolio?

The stock and commodity markets are an exciting place to be in. Investment in stocks and commodities has yielded fantastic returns for many folks. However, playing the stock and commodity markets needs a fair amount of trading and investment skills that common folks do not have. Online trading games can work as a free-trading training ground for such people. Investment games and trading simulators allow people to familiarise themselves with the way markets work and judge the consequences of their actions.

How stock market games work

A stock trade game equips the player with mock currency – for example, $10,000. The stock trader is supplied with technical and fundamental information and analysis. Fundamental factors like interest rates, GDP data, employment figures, housing rises, etc. are displayed in real-time. There are many fundamental changes happening across the world which impact the stock prices. The player also can view and analyse technical data of stocks, commodities and indices like the FTSE. Analysing technical and fundamental data and interpreting it to buy virtual stocks needs financial knowledge and skills. The virtual trader is also introduced to stock market and virtual trade concepts – he learns about brokerage, and why he must pay a deposit to his broker towards online trading. The player learns the stock market and then he starts buying and selling with his mock currency. If he buys and sells, his transactions are squared off on the same day and he makes a profit or a loss. If he holds the stock for a few days, his profits and losses are calculated at the time of selling. The player learns about buying stocks, shorting them, how indices move, how stocks react to news, how technical movements influence stock prices, CFD dealing (contract for difference), and much more.

Advantages of playing a stock market game

The player learns how the stock market works without spending a single penny. He buys and sells with mock money and does not incur any loss. This is an excellent start for prospective investors. The player understands the concepts of profit and loss. He begins to realise that he must book profits from time to time, and always stop his losses if they cross the line. He learns risk management. The player understands different trading strategies like futures and options, binary options trading, commodity trading, and more. He learns the impact of fundamental and technical analysis and understands how to apply them to the market. The player learns how stocks behave when markets are rising or falling and how and why certain stocks buck the trend. Most importantly, the share trader learns to manage money. He realises that money is important and must not be used to speculate.