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Trading play money verses real money

Trading play money is easier than trading real money.  Don't go and get the monopoly money and think you can trade with that.  Simulated trading is a very important building block to your trading success.  There are some important areas that you need to take into account once you start sim trading before you put your hard earned real money out there.

When sim trading you will get faster order executions on both your buy and sell orders.  The reason you are getting the faster order fills is that you do not have to wait in line behind the other orders that were already placed there by other traders.  Once the price is hit where you have your order in sim trading it will be filled immediately.  One good way to work through this is to observe how many orders were at your buy price and the number of orders that were already there.  Then watch the number of orders that are executed at that price, once the volume reaches the initial amount that was already there you can have a good indication that your oder was filled.  When looking to see if your sell order would have been executed an even better assurance that your order would have been filled is if the price goes one increment above where you had your sell order.  

When you start sim trading you should start keeping a journal.  Document every trade that you make, Write down why you entered the trade.  What indicators you were looking at that made you think it was a good entry point for the trade.  Write down the entry price and what your initial target is to exit the trade.  You can even print the chart and attach it to your journal.  Write down your exit price when you get out of the trade. Document the gain or loss from that trade.  You can not write too much down in your journal.  Some time after the close of the trading day you need to go back and review all your trades with you journal.  By looking over the trades you have made each day, try to see the good and the bad of each trade.  There is always room for improvement in trading.  Trading is an business that requires constant and continued learning.  The market is not that same every day.  Just because the market did one thing one day does not mean that it will do the same thing day to day and it will not react the same to news as it did another day. You need to work continually at finding what is working for you and what is not working for you.

There are a number of free services that will give great information on charts, ticker symbols that show advancers and decliners and sector heat mapping.  Work with various demo accounts in the various markets, stock market, futures market, currency market to see what you are comfortable with before you start trading with your real money. 

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