A simulated stock trading account allows investors to practice their stock-picking skills without investing money, online. It is a safe, structured environment where new investors learn about investing without money. New investors are often confused between a Demat trading account and a simulated trading account. A Demat trading account is a repository to store digitally bought shares. A trading account helps you trade shares in the stock market.
For beginner traders, there are various trading apps which help you build the best trading account. Motilal Oswal, Zerodha and Sharekhan are amongst the best trading apps for the best trading account. Trading in the real world is different from simulated stock trading. Here are a few benefits and drawbacks of a Simulated Stock Trading Account.
Benefits of Simulated Stock Trading Account
Practise before entering the real market
A Demat trading account or a trading course would make you feel like a capable trader or investor, but trading is not a theoretical practice. A stock market is where you invest real money with higher risk. You need experience and time to practise before entering the market.
Learn Digitally
With the world going digital, another benefit of Stock Simulator in India is learning through a laptop or a mobile at your fingertip. You can practise and learn this anytime and anywhere before risking your money.
Stock Simulator helps in Understanding the Market
A simulated Stock Trading account will help you learn market dynamics and evaluate the impact of several scenarios in the market. It will help you study the real market while putting in less amount and help you perform better while making a real investment.
Disadvantages of Simulated Stock Trading Account
Stock simulators allow you to practice trading without investing capital that’s close to the real market. However, there are a few drawbacks a trader must know.
Can Build Pressure
While investing virtually, you have no risk of losing money which may make you complacent. However, in the real market, pressure will build up when you start losing money, due to a lack of focus or discipline.
Extra charges
In the virtual environment, an investor is not charged brokerages, slippages or margin money maintained by the broker. Hence, traders must check charges in the market and compare them in the virtual market to check profit and losses.
Real-time Experience
Although Stock Simulators are close to replicating real-life experiences of trading, most of them do not offer a real-time trading environment with live prices. The stock prices can differ within 15-20 mins, making it one of the drawbacks.
All in all, new traders should take full advantage to up their skills, virtually. With focus and discipline, they can master. Traders trading for years can also use these trading apps for new theories and strategies. Motilal Oswal offers the best trading account in the market with primary advantages and disadvantages to study before investing. It is advisable to research or take a broker’s help who provides real-time market data in real-time market conditions, before entering.
