Is it a good idea to start with a simulator?

andread · Feb 8, 2006

Hi.

I'm an absolute starter, and given my lack of experience and my limited financial resources, I wouldn't be happy to waste a (for me) good amount of money in a short time.
I know that there are some sites on the internet that simulate a stock market. One example is the investopedia simulator:

http://simulator.investopedia.com/

I would like to ask
1) is it a good idea? Are these simulators realistic? Do they correctlyl simulate, for example, the way orders are executed, with the correct timing?
2) is there one that you would recommend?

Thanks

coolweb · Feb 8, 2006

IB has a nice real time simulator

buttontrader has a nice simulator but needs IB feed

Of course simulating is a good idea,

If you were a first time driver, would you sign up to drive in the daytona or would you first go to Disney world and do some bumper car riding.

Whats more safe

DynamicReplic8r · Feb 8, 2006

Yes, it's a good idea, but when you start trading with real money, keep in mind there is a difference. Most simulators will have you piggy back someone elses orders. So, you tend to get better fills.

Also, if you take out the entire offer, for example, the offer will repopulate. You could buy as many billions of lots as you wanted. In the real world, especially in illiquid markets, if you show some size in the bid, there is a good chance that some of the offer will disappear.

murray t turtle · Feb 8, 2006

Quote from coolweb:

IB has a nice real time simulator

buttontrader has a nice simulator but needs IB feed

Of course simulating is a good idea,

If you were a first time driver, would you sign up to drive in the daytona or would you first go to Disney world and do some bumper car riding.

Whats more safe

===========
Andread;
And are you reading Jack Schwager 3 top trader books???;
actually re -reading & studying it again/again/again...

Yes on simulator but should still keep good paperwork records;
even though it requires more work & ink

And don't be surprised if real money is really more difficult;
cause your brain/guts know the big difference between real money & monopoly money.

Wisdom is profitable to direct.

andread · Feb 9, 2006

Quote from murray t turtle:

Andread;
And are you reading Jack Schwager 3 top trader books???;

no. Are they worth a read? Which one particularly? This guy seems very interested in futures, which at the moment are a bit too much for me

andread · Feb 9, 2006

Quote from coolweb:

IB has a nice real time simulator

Really? Where? Do I need to be a regular member, with a fee? The only thing I have seen is the demo account, but as far as I know I can track very few stocks

buttontrader has a nice simulator but needs IB feed

yes, that looks nice. Thank you

andread · Feb 9, 2006

Quote from DynamicReplic8r:

Yes, it's a good idea, but when you start trading with real money, keep in mind there is a difference. Most simulators will have you piggy back someone elses orders. So, you tend to get better fills.

So this makes times shorter, I assume.
Is it a big difference?

Also, if you take out the entire offer, for example, the offer will repopulate. You could buy as many billions of lots as you wanted. In the real world, especially in illiquid markets, if you show some size in the bid, there is a good chance that some of the offer will disappear.

I guess this is the reason why the investopedia simulator doesn't allow trades with large volumes
But I'm far from reaching that point :-)

NihabaAshi · Feb 9, 2006

Quote from andread:

Hi.

I'm an absolute starter, and given my lack of experience and my limited financial resources, I wouldn't be happy to waste a (for me) good amount of money in a short time.
I know that there are some sites on the internet that simulate a stock market. One example is the investopedia simulator:

http://simulator.investopedia.com/

I would like to ask
1) is it a good idea? Are these simulators realistic? Do they correctlyl simulate, for example, the way orders are executed, with the correct timing?
2) is there one that you would recommend?

Thanks

Don't waste your time with any realtime simulator that's not your broker's simulator or the simulator of a third party program that works off your broker's data.

My point is that you want to be familiar with your broker execution platform prior to any real money trades to prevent (reduce) trade execution errors.

You also want to only use your broker's simulator so that you can determine connection issues and many other concerns that you will not know about via using a simulator that has nothing to do with whom your going to be eventually placing real money trades.

However, if your broker doesn't have a simulator nor allow third party simulators to access its data feed...

Start trading with a very very very small account and use that as your practice account even though its real money trading.

Those early real money losses (small losses) will be more educational than profits or losess via someone's else simulator.

Last of all, only simulate with the same amount of money your going to be trading with in your real money trades.

I've met too many people practicing their methods on 100k - 500k simulator accounts when they have less than 10k in their real money account.

This will prevent developing any unrealistic goals or expectations if your a profitable simulator trader.

Mark
(a.k.a. NihabaAshi) Japanese Candlestick term

mrmoose · Feb 9, 2006

I do not like stimulators as that they give a false sense of liquidity. you are much better of trading small for real and scaling up. If your account is too small to take losses on small shares to learn then it is too small for you to trade effectively