Trading can often be seen as an asset niche, technical and honestly, a 'tricky' occupation or hobby. It's often filled with loads of data entry points, commodity options and economic news articles that you have to follow. It seems interesting and exciting; however, taking the first step can seem daunting, especially for beginners.
For anyone fascinated by the topic of trading, knowing that feeling challenged is normal but also knowing that there are smart tools at your disposal at every turn, is important. The biggest smart tool comes in the form of a simulation. This article aims to shed light on how simulation can be used for beginners and offer helpful tips and tricks to navigate this as a novice.
Pick a Reliable Simulator
The thing about trading and simulation in particular is that you need to find a reliable platform to use. After all, you're trying to learn this so that you can have a better chance at understanding what a real market looks like, which means that you need a simulation platform that clearly echoes the realities of trading markets. Using a platform that is an authority in the field and a clear leader, such as WR Trading Simulator, is a smart move as it allows you to make trades using virtual money in live or delayed markets. By doing this, you get a taste of what it feels like to trade but without the pressures that typically come with this market.
When it comes to simulation, it's not just about picking a platform, although that is crucial, there are many other aspects that you need to bear in mind within the idea of simulations, such as picking your asset, developing a strategy, keeping a trade journal and setting a routine – all of which will be further outlined below.
Find Your Asset or Commodity
The thing about trading, especially in this digital age, is that there are loads of different assets for you to trade. Two decades ago, fiat currencies were already considered a tricky commodity to trade; nowadays, they're considered one of the most robust, as so many other assets have entered the trading ring.
The reason that you need to think about this during the simulation process is that it will govern you when you actually move on to real trading. What you practice is what you preach, therefore, the assets you use during simulation will likely be the ones you move on to in real life, as they're the commodities you know the most about.
How you should pick your asset is by doing research. Spend as much time as you can comparing certain assets to others until you find one that you think you understand. Also, consider the reward-to-risk ratio when picking.
Test Your Strategies
A lot of people who trade follow certain strategies that have done them well over time. Seeing as you're still a beginner means that you have to figure out which strategy works best for you. Don't pick anything too drastic to start, looking and testing moving average crossover, breakout trading or support and resistance levels should already give you enough to work with.
You can move between different strategies, as that is the beauty of a simulation – nothing counts or is set in stone, other than what you're able to learn. Therefore, you should spend as much time as possible making mistakes during the simulation period, as you have very little to lose, other than time. But it's better to make the mistakes here than in real-life trading, that's for sure.
Keep a Trade Journal
Trade journals are very smart to keep, as they allow you to summarise the most important aspects of trading that you've learnt. The simulation platforms are there to teach you and while you might think that you will remember everything you learn, chances are that a week later you'll forget. This is where a journal is helpful, as you can store the most important bits of information you learnt during this period and then always peek back at it when and if you ned it. It's also a good habit to take a moment out of your day and write about what you've learnt, to further consolidate that information.
Set a Routine and Stick to It
Setting a solid routine for simulation trading needs to suit your personal needs, times and calendar. You can start by picking a time each day that works for you. This can either be a short 30-minute or can be longer if time allows.
You have to treat trading like you do everything else that becomes a hobby: same time, same mindset. You should begin each session by looking at your previous trades and checking your trade journal, as mentioned above. Then, look at the market you're focusing on, read a bit of news or look at a chart, and decide what (if anything) you'd trade that day. Remember that with simulations, you don't have much to lose, so go for it, but be smart about it. Also, try to keep distractions away from you because trading requires a lot of focus.
At the end of the day, reflect on what went well and what didn’t. It’s more about building habits than anything else during this period. The goal here is discipline and learning through mistakes.