Learning the stock market trading or investing is a process. It cannot be achieved during a single day or so, it takes several weeks or months. Creation of a system or strategy is one part of this process. It is often recommended to test your trading strategies and systems for your investing before you commit real money into your trades.
There is also another opinion. It is idea that the best way to learn online stock trading is to jump into the real stock trading immediately. The proponents of this idea think that a paper trading is the worst thing any beginner can do.
You have to trade to be good trader
They think that if you are beginner learning about the stock market you have to trade with real money. You have to use an amount of money that is small enough so you can afford to lose it. But it is large enough so you will feel a pain if you do.
Making simulated paper trades is totally different to the real trading as you make totally different decisions. The main difference is in an amount of an emotional pressure you experience in real trading. Nothing is the same.
The most important thing is that you have to trade with real money and real brokerage account to become a good trader.
There are many star traders and really good investors who think that it is the only way for learning the stock market secrets. Only such way can make a successful profitable trader from you.
This is often based on their personal experience. Most of them used some money at the beginning and they lost it all. They think that It teaches respect for the market. And it is definitely better to learn a stock investing lesson that you can lose everything when you don’t have that much money than to learn it later on.
So they feel that losing of all your money is one of the best things that can happen to beginning and learning trader.
My learning experience
I have the personal experience to share. I have started to trade & invest without any stock market education. After a few weeks I lost a significant amount of money. I felt the pain really. It pushed me to start real stock market education.
When I created my first strategies I tested them with paper trades. I did it. And when I though that they work I started to make real trades with a small amount of money. So I do both steps. The paper trades first and real trades with small amount of money as the next step.
And only when I finished these two steps I started to increase size of my broker’s account and position size for my trades. I can recommend this way of learning the stock market activities for you too.