Mock Stock Trading – Good For Learning, Bad For Profits

| February 25, 2015

mock stock tradingMock Penny Stock Trading… The Worst Idea Ever

Today, I’m going to give you a bit of advice.

Listen, many new traders think the best way to hone their trading skills is to paper trade.  So they paper trade… and mock trade… and run software simulations… they open a brokerage account and use the mock trading software.

Weeks and months go by and they’re excited about the money they’ve made… and how good at trading penny stocks they’ve become.

Let me be honest… this is the worst kind of thinking ever.

Am I against paper trading or mock stock trading?


I’m going to keep this short and sweet.

Mock stock trading is great for the first week.  You can see how the market works, how to place trades… how you get fills, and what it’s like to get in and out of penny stocks.

This kind of fake trading teaches you the process.


This is not practice trading.  There’s no real world experience to be found in fake trading.  For new traders, you can and should paper trade for as long as it takes you to get comfortable.

But don’t fool yourself.  You’re not gaining experience.


In Mock Stock Trading – MONEY Changes Everything


The root of all evil – according to some people – changes the dynamics of trading quickly.

Mock trading is like shooting hoops as a teenager… you remember.  You made a very serious bet with your best friend about shooting free throws or three-pointers.

At some point, you missed and lost the bet.

So you doubled up.  You stretched for crazier shots and crazier bets.  You doubled again… and again… and again…

Eventually that very serious $3 bet turns into you owing your friend $300,000.  You’re not going to pay… it’s not real money.  You go watch a movie and call it a day.

That’s what paper trading is…  It’s fun… in a risk free world.

But it’s not real experience.

Don’t fool yourself.

You’ve got to take the training wheels off.  When you put real money on the line, EVERYTHING changes.

Suddenly your stomach turns with every up-tick and down-tick in the market.  You start to question your research, your beliefs.  You start going back and double checking the company.  You suddenly stay glued to the computer screen.

You might even break out into a cold sweat and feel your heart race.

You watch the stock and it suddenly moves.

I’m going to let you in on a little secret.  That first big move a penny stock makes… that first big move with real money on the line… you’ll start to question everything.

And it doesn’t matter if the penny stock moves in your favor or against you… you’ll start to question everything.

These are the emotions that destroy traders.

This is why you need a plan… and need to work a plan… and try to suppress your emotions.

Emotions in trading can be very dangerous!  You get out of good trades too early… and stay in bad trades too long.  And those emotions are something that mock trading will never give you.

How To Do Mock Stock Trading The Right Way

Look, if you want to mock trade the right way… do this.

First learn the system.  Spend a week trying out different buy and sell orders, use the software.  Practice on your broker’s platform – all without risking money.  Mock trade as much as you’d like.

Then take the training wheels off and start trading.

You’ve got to trade with real money to really learn how it works.  But don’t blow your whole investment.

Start small.

If you can afford investing $1,000 in a single stock… start with $100.  That’s right… start with 10% of what you want to eventually trade.

Put real money on the line and see how you react…. See what emotions start emerging.

This isn’t Mock Stock Trading… but it’s the best training you’ll ever get.

You’ll have a few wins and a few losses… you’ll start to better understand the markets!

Only after you’re comfortable and able to control your emotions do you start increasing your investment sizes. Work your way up slowly… it might take you a year or two to go from starting small to full size trades.

Do this slowly… and you’ll quickly agree with me that mock trading is NEVER a substitute for real trading…

Good trading…

Brian Kent

Note:  Brian Kent has been trading the markets for more than two decades and now writes and edits for  You can sign up for the penny stock research newsletter a trusted source for the truth about penny stocks! Sign up today and get a free research report –


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Category: Investing in Penny Stocks

About the Author ()

Brian Kent is the Editor for He also pens Penny Stock All-Stars, an investment advisory focused on discovering small-cap and micro-cap stocks that are destined to become the market's next Blue Chips.