Stock Market Simulators: What They Are and How They Work

These brokers have stock simulators that let you try out new investing strategies with no real money on the line.
Dayana YochimAug 18, 2021

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There’s nothing wrong with a little friendly investing competition. Especially when none of your actual money is on the line.

What are stock market simulators?

Stock simulators work by giving participants a set amount of play money and a time horizon. The investors who generate the highest returns are technically the “winners,” but there are no losers here — the funds are fake, so there’s no risk. But what’s best about stock market simulators is the invaluable experience they provide new investors. Anyone can get their feet wet in a simulator before diving head first into the real stock market, where real money is at stake.

» Want a leg up on the competition? Read all about how to buy stocks

Why use a stock market simulator?

In the real world, investors aren’t competing against other players’ returns. “Winning” is about equaling or exceeding the performance of a benchmark index.

For example, if you’re picking and choosing individual stocks and after five years your average returns are less than the returns of the S&P 500, you may be better off investing in a low-cost index fund that tracks the S&P 500. However, if you manage to beat the index with your stock picks (mind you, research shows this is unlikely, even among professional investors), you could say you “outperformed” the stock market.

In the actual stock market, success isn’t determined over weeks or months, but years.

4 reasons to try a stock simulator

  1. You’ll get a general investing education. Many of these platforms offer a very real education in investing, with a library of articles, tutorials, demos and, at some brokers, the chance to interact with an online community available to answer technical and investing questions.

  2. It’s a safe space to learn the mechanics of placing trades and building a portfolio. There’s a reason student drivers take the wheel for the first time in abandoned parking lots. The best place to make all the rookie investing mistakes, such as mistyping ticker symbols or misunderstanding order types, is wherever you can suffer the least financial damage.

  3. You can test drive new investment strategies and types. Looking to expand your investing repertoire? Trying before you buy is especially important when venturing into new strategies, like shorting stocks and trading options, and more sophisticated investing fare such as futures and commodities and foreign currencies (forex).

  4. You’ll learn the importance of keeping emotions out of investing. As billionaire investor Warren Buffett says, one of the keys to being a successful investor is the ability to control the emotions that lead other investors astray. Even though investing decisions are less loaded when there’s no real money on the line, the brain doesn’t always fully absorb that concept — think haunted houses, roller coaster rides and movies featuring vintage dolls that come to life and carry out evil capers after dark. The emotions you experience while investing in la-la land provide a preview of what to expect when you encounter the real and unavoidable market ups and downs.

» Looking for some fresh ideas? Read up on these stock market strategies for beginners

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Where to find stock simulators

For a virtual-trading practice environment that's close to the real thing, you can’t get much better than the simulated investing platforms offered by actual working online brokerages.

These practice accounts — sometimes called paper trading accounts — typically mirror the broker’s working trading platform.

Most are free, although they may require you to set up an account. The best brokers give test drivers access to a fully functioning setup with the same tools that active customers use: watch lists, stock screens, research and live or slightly delayed data feeds.

Online brokers that offer stock simulators

Of the online brokers that NerdWallet has reviewed, the following received 5 stars for their trading platform functionality and offer paper trading accounts. We've excluded paper trading accounts that are only a part of a limited demo version of the product. Note that some of the brokers below may require opening and funding an account before gaining access to the paper trading account.

Product name

Learn more

E*TRADE*

E*TRADE Paper Trading

TD Ameritrade*

TD Ameritrade paperMoney Virtual Stock Market Simulator

Interactive Brokers*

Interactive Brokers Paper Trading Account

TradeStation*

TradeStation Simulated Trading

Webull

Webull Paper Account

*These brokers are NerdWallet advertising partners.

Nerdy tip: If you're interested in checking out a broker that doesn’t offer a paper trading platform for potential customers, or if the qualifications for signing up are too onerous, contact customer service and ask if it can provide temporary access to a demo account.
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