Step #3 – Practice Makes Perfect
There are two key ways to practice:
- Stock Journal
- Stock Simulator
Stock Journals were around when stock simulators did not really exist or were just coming into their power. The point of a stock journal is to write down what you bought, at what price, with details, then track how your stock did. It is basically practicing on paper. And, though it is not a real life trade, it allows your brain to expose itself to the concepts your mentor has been working with you to grasp from step #2. I personally learned utilizing a stock journal and later stock simulators.
Stock Simulators are an excellent way to practice and get the swing of the basics behind trading for two reasons: less writing and more applying to real life. Through the FIO, we have teamed up with investopedia.com to offer multiple competitions for our members to participate in. To get a stock simulator account created, head on over to www.investopedia.com and click the “simulator” tab on the top of the page then register yourself. You will by default be put into a competition which is where I suggest you start practicing.
Now what Mr. Magic?
I suggest browsing around all the different aspects of the simulator. Notice how alot of the terms you saw in step #2 are now coming out! It is important to get a feel for what is there, because in real life you will find yourself looking at an extremely similar setup. Try placing a trade if you want. Follow the instructions to fill out your trade “ticket”, and place your order. Don’t know what to buy? Buy anything, it really is irrelevant the first time as you just want to test out the waters. If you need help with placing a trade catch me online and I will be happy to walk you through it.
The purpose of the first buy is to get you associated with everything you have learned thus far. All the basic terms should start coming together. Find the trading ticket simple to fill out? Enjoy then, because it is also that easy in a live trading account.
Practice, Practice, and when you think you are all set, Practice some more!
It will take a few times to really get the hang of it, but isn’t that a nice feeling? You started knowing very little about the stock market, and already you are applying basic knowledge to make your first few trades. Managing the money in your account is important, and all the rules that apply in real life apply in the simulator. You can’t spend more than you have in your account (unless on margin), and you can loose everything you have.
What I really want you to take out of this experience is the simplicity behind it. So many people think that trading is such a complex task with so many variables. Now, though we haven’t stepped into the research area, buying and selling a stock is actually a very simple process as you can now see. Again, don’t worry about making or loosing money and applying crazy terms to your first trades. This is a simulator, which is designed to help you practice. You can’t run before you walk, and you can’t walk before you crawl, so don’t overwhlem yourself, keep it simple, stupid! 
