Virtual Trading in India

Virtual trading can prepare you for big success in your investments

Sep 28 2021
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Virtual trading as the name suggests is a non-real, a simulation, a mock-up, a near to real-experience of trading in stock market, commodities, mutual funds and other financial assets. There isn't any real money involved, there are no real trades placed on stock exchanges, and of course, no loss and no profit, because it is an artificial trading environment. But, the prices and charts of stocks shown will be real, from the official market/exchange, either live or delayed by few minutes.

Why Even Consider Virtual Trading

Well, one may ask when it is not real investing or real trading & nothing to do with the real money, then what's the purpose? Why should I even waste my time?

Well, not so fast. Let's see how confidently can you answer the following questions. Be honest! 

1. Do you know anything, or everything about the investing experience? How to tackle market conditions?

2. Do you already invest in stock market? Have you been successful? Made mistakes?

3. How much, or say how big you investments are?

4. Can you confidently invest, say 15% of your net worth?

5. Have you suffered big losses in your investments, or anyone close to you, that you know of? Does this frightens you?

6. Are you a good investor, in the sense, you constantly follow the performance and regular market fluctuations in your investments? And make timely changes to your portfolio?

7. Can you afford the services of a wealth manager, or a top expert to invest on your behalf? Or, would you rather invest your own hard earned money yourself and be in full control of the outcome?

My best bet is that, the questions above have already set a lot of bells and thoughts ringing in your mind. And that's good.

So, yes virtual investing is very important step in your overall journey of investing in the world of stocks, where both rags to riches, and richer to rags stories are abundant.

Goals of Virtual Trading Platforms

The objectives of virtual trading are as follows,

  • Show you the real-time or delayed (say 5–10 minutes) prices of the stocks, commodities, mutual funds that are traded in the real world, in exchanges like NSE (National Stock Exchange), BSE (Bombay Stock Exchange), New York Stock Exchange (NYSE). Thus familiarizing you with checking prices of stocks.

  • Show you the price charts of various stocks, for different time frames like 1-day, 6 months, 3 years or maximum (since the stock was listed on exchange). Platform will also give you access to technical charts, where you can play around, learn to use chart patterns and how to identify trends. Thus, familiarizing you with using charts, in your investment decisions, if you wish to.

  • Introduce you to the procedures and experience involved in the selection and execution of your investments, or trades.

  • Various virtual trading platforms will allow you to first search for stocks, commodities, and then you will need to choose the ones you are interested in, followed by selecting the type of trade you want to execute, like buy, or sell or short.

  • Then will come the step of selecting the quantity of the stock you want to invest in, followed by the price at which you want your trade to execute. The price option can be of various types like a market order, a limit order.

  • Then finally, you will be asked to confirm your trade and that’s it. You have now virtually invested, say Rs.300,000 to buy 100 shares of Reliance Industries at a price of Rs. 3,000 per share, virtually (let’s hope the price reaches there soon!).

  • And then will come the final step where you would be shown the various brokerage charges, exchange fees and government taxes that you would have to pay in the real world; and that amount of money shall then be deducted from your virtual account balance.

This nearly completes a very good real-life simulation of the procedure and steps you would be expected to follow, when you are going to invest your real money to buy real stocks, from a broker via your demat account, on the online trading platform provided by your broker.

Types of Virtual Trading Platforms

Some platforms will provide you a full nearly 100% simulation of an actual, real stock trading platform, with almost all the steps that you would need to follow to invest.

While some will not show the brokerage fees, or other surcharges/taxes on your investment/trades.

Most of the platforms will give you virtual money to play with, say Rs. 1 crore or 10 lakhs.

Every platform will have a different set of rules for its users, how they can participate and invest, and when their virtual money will expire etc.

These days, some platforms are also offering prizes, rewards to the winners, leaders of virtual trading contests. ZoomStocks is one such platform, which you may try.

Top Virtual Trading Platforms in India

1. Dalal Street Journal — Stock Market Challenge

2. ZoomStocks — BigBullsLeague

3. Moneycontrol — Moneybhai

Amongst these, the newest and most different one is BigBullsLeague, which offers rewards to the winners of virtual trading contests. Also, it allows you to choose from 4 different type of contests like, week, month, quarter or year which is unique and helps one understand, practice the aspects of time-frame based investing. You can join it by clicking here register.

For example, if you are investing to build wealth for college fees, wedding after 1 year and similar events, this tool can really help you prepare well for such duration-based investing needs.

Importance of Virtual Trading

I'm sure if you're still reading, you would have realized that this is highly beneficial to you, if you are totally new to the world of investing, or a beginner. And even if you are an experienced investor, or trader, you would still be feeling the urge to try this, and why not, testing & improving your skills always pays big rewards!

Virtual trading prepares you for the actual process of investing.

As you create your virtual portfolios, you will naturally begin to check the changes in market prices and news related to your investments or stocks.This helps you develop the habits of a disciplined investor who regularly looks after every aspect of the performance and prospects of their investments.

What it will also push you to do, if you really take this seriously, is build a very important, a very crucial skill of being able to take right decisions about your investments at the right times. Like the ability of realizing the maximum loss bearing capability you can actually afford, thus, being able to cut down your losses at right time. Similarly, if you are too greedy, it can teach you how to maintain your profit appetite, when you will see your profits melt away just because you were being too greedy, even when your investment gave you more than the returns you wanted! 

Likewise, it can help you figure out your investing style/strategy. How to either gradually, in small quantities buy/sell the stocks, or whether to buy/sell all the stocks you want to, in one shot.

Drawbacks of Virtual Trading

As it is virtual, you may not take it seriously.

If you are not serious, then you will lose interest quickly and lose the chance to improve your skills.

You may not track your investments/news, even if you check your virtual investments sometimes.

A Last Word of Wisdom

If you are serious about making a difference to your financial life, then every tool which can help you in getting you there, is naturally a big opportunity to get you one step closer to making it a reality. Virtual trading has great benefits and a determined person, regardless of whether an experienced investor or not, can learn a lot about themselves, their emotional response to investment performance, their investing styles, their investing decisions, and their investing intelligence.

So, virtual trading can be a game changing tool which can help you in realizing your financial dreams, financial independence, but only if you use it seriously and apply the learnings in your real life investment process.

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