Why do 86.4% of traders lose money within the first year day trading penny stocks? Without exception it is because they fail to appreciate the importance of paper trading penny stocks. This practice is not only overlooked, many would-be beginners swear that they are above paper trading penny stocks. This is a mistake, of course. And this is why this brief exploration of the benefits of paper trading might just be the most important thing you read before you execute your first trade – for real money. Get this down to a habit and you’ll be miles ahead of the 86.4% of traders who get it wrong.
Paper Trading Penny Stocks – Value In Practice
Paper trading, as the name suggests, is the act of conducting trades in a notional environment. It is basically simulated trading; the tickers may be real, and can be tracked against the actual real-world performance of the ticker, but the results you get are always measured in a notional or simulated environment. So for example, you want to paper trade penny stocks and pick out stock XYZD, trading at around $0.20 at the time of trading. You then decide to risk $100 (on paper) to acquire 500 shares in the company. At this stage one of two things may happen. XYZD may go up, or it may go down. Regardless of what it does, however, you’d have gained some experience in selecting a penny stock for trading.
Paper Trading Penny Stocks – Confidence & Fear
Many day traders believe that the main reason they should take on paper trading penny stocks is because of the way it helps them risk nothing in getting to grips with trading penny stocks. This is partially true. Yes, the element of pretend money does help in learning the ropes so to speak, and it does offer a really strong environment within which the elements of day trading can be practiced. But the real reason you should make paper trading penny stocks a big part of your strategy runs way deeper than that. It all has to do with the management of your emotions.
Fear and greed: the two emotions can wreak havoc on the unsuspecting trader and paper trading penny stocks is one effective strategy for managing them. Conducting enough paper trades whilst paying close attention to both fear and greed signals can help you get those emotions under control.
There’s also the confidence factor; many would argue this is a huge factor that influences trading success. By paper trading penny stocks for a reasonable amount of time before trading with real money, you get to develop the confidence needed to execute trades, for big dollars, in real time. Many successful day traders have attributed their success to the diligence and confidence developed whilst conducting paper trades of penny stocks. Your journey needn’t be any different. As a matter of fact, success leaves clues so you can do no worse by following the examples of others that have gone before you.
And how do you go about paper trading penny stocks? Well, the easiest option is to use Google to bring up the best services that offer this sort of thing. We don’t want to be overly biased in mentioning any specific services, but rest assured, we’d recommend any of the top 5 picks suggested by Google. All right, we’ll cough up this one.
In any event, selecting the right service is a good deal better than trying to go it alone in learning the day trading penny stocks ropes. But we appreciate that some traders are fast learners, have a ton of ambition, and want results right now. For those traders we recommend an existing penny stock picking service. The best ones offer their picks for free and offer a ton of free tutorials and trading education materials. You can begin that journey by going here.