Last Friday, during my Premarket Prep, I went on a small rant (yes, I do that sometimes), about something a lot of new, uneducated, and unpracticed traders do…
They come in premarket at 4 a.m., guns blazing, ready to make like ten trades without any knowledge of how to to trade, or what float even is…
And by the way, I have no problem with uneducated traders…That’s why I’m here — to teach and mentor you before you start trading.
But those people that know nothing and can’t stop themselves from trading premarket, can end up blowing tens of thousands of dollars in one day.
These people who are too aggressive and can’t calm down and be patient are the primary reason 90% of new traders fail.
My job is to keep you alive when you trade so you can come back another day and keep growing your account.
One way to do this is not to trade premarket or before 9:45 am if you’re new.
But if you insist on trading premarket, I recommend starting really, really small…like buying only ten shares of a stock.
Or I have another suggestion…
You’ll get hands-on experience trading all the strategies you can dream of premarket, without risking any capital.
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How to Practice Trading Without Risking Real Money
If you know me at all, like members of my Daily Income Trader Service and StockstoTrade Advisory do, you’ll know that I constantly talk about “finding your pattern, or finding your niche.”
I get this question a lot…”How do I find what works for me without putting my real money on the line?”
Maybe you’ve been trying different strategies but you’re bleeding your account little by little in the process.
Losses are part of the game, and slumps happen, but they’re not ideal when you’re just starting out and want to practice….
Practice is key. It’s part of your trading education.
That’s why paper trading is perfect for new traders. It lets you test your strategies without risking real dollars.
What Exactly is Paper Trading?
Paper trading is really just simulated trading. It lets you “trade” in real markets without using real money.
It’s a practice account that follows live market data, so your orders match real-time movements but don’t affect your real funds.
Think of it as Monopoly for the stock market.
This makes it a safe environment to experiment, make mistakes, and figure out your strategy without wasting your precious capital.
Why Paper Trading is a Must-Use Tool
You might think, “Why waste time practicing if I’m not making real money?” Well, here’s the thing: trading is a skill.
I always use this analogy with my Daily Income Trader subscribers: You wouldn’t walk into a hospital on the first day of medical school and perform surgery on someone, right?
At least at the hospital, someone can prevent this from happening.
But not with trading. No one’s there to stop you. It’s up to you to act responsibly and put in the time and work before entering the market and trying out every strategy known to man.
Paper trading lets you figure out your edge—what works for you and what doesn’t—before you’re risking your hard-earned cash.
It’s invaluable for testing out strategies and dialing in on your niche.
The Right Mindset
Many new traders skip paper trading because they feel like it doesn’t carry the same thrill as live trading.
Treat that paper account like it’s your real $5,000 or whatever amount you’ve set.
Make yourself believe that if you blow up that account, you’ve lost real money, and it’s time to step back, refine your rules, and rethink strategies.
You have to take it seriously.
Track each trade. Log your successful setups in a trade journal, track your mistakes, and see what’s working. This is how you discover your edge.
Say you’re testing out a late-day VWAP break setup, and you see your paper account go from $1,000 to $4,000 in a few weeks. That’s a solid sign you’re on to something and maybe you’re ready to step up with real money.
The best part about paper trading?
You can also try high-risk strategies—like short selling, which is tricky even for the best traders—without risking real money.
Make Paper Trading Work for You
After everything I’ve said, it’s clear that the most important thing for any new trader is to have a platform that allows paper trading.
Not all of them do.
My top pick is StocksToTrade.
This platform is tied to live market data, so if you place an order for 1,000 shares of XYZ stock, it has to actually trade that many shares at your price to fill the order.
And it isn’t just some end-of-day or average-price simulation like you see with other platforms—it’s as close to live trading as you’ll get.
That kind of realism lets you build an edge before going out on the actual battlefield.
StocksToTrade also includes technical indicators, charting, and stock screening capabilities, everything I look for in a platform. It also has a selection of add-on alert services, so you can stay ahead of the curve.
Grab your 14-day StocksToTrade trial today — it’s only $7!
My Final Thoughts…
At the end of the day, paper trading is your testing lab.
Track everything. If you see a strategy consistently performing well, that’s your signal to start moving into live trading.
But if it doesn’t work in a paper account, it definitely won’t work in a live account.
To learn more about how to get started in trading, join our StocksToTrade community.
We have tons of free live webinars that run all day and teach trading strategies, provide info on our Oracle system, and offer other valuable training.
And if you’re looking for more stock ideas and trading mentorship, subscribe to my StocksToTrade Advisory service.
Every STT Advisory member gets a monthly newsletter with a list of my top picks, three weekly videos with my watchlists, bonus reports, and more.
Sign up for StocksToTrade Advisory right here!
Have a great day, everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade