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.

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

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 , you may be better off investing in a 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.

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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 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.

» Learn more:

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.

*These brokers are NerdWallet advertising partners.

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