6 Benefits of Utilising Simulators in Trading Platforms

Utilising simulators in trading platforms can significantly help improve trades and strategies. For beginners, it’s helpful since most simulators have step-by-step instructions on how to set your trade before executing it.

Usually, trading simulators are embedded in trading platforms, so you can practise whenever you like. In this article, we’ll discuss simulators in trading platforms in more detail.

What is a Trading Simulator?

A trading simulator is an advanced tool that allows traders to monitor real-time trades, and buy and sell stocks without using real money. It’s also one of the things you should look for in a trading platform.

For instance, TradingView has a simulator called Paper Trading where you have to practise money to trade. This allows you to manage your chart setting, and set your preferences, including the budget, volatility level, trade direction, trade size, and risk management tools, and review the trade summary. Once you’re all set, you can run the simulation, and see the results. You can run as many simulations as you can to improve your trading strategies.

Why Use a Trading Simulator?

Whether you’re a beginner or a professional trader, a trading simulator can provide various benefits. Some of these benefits include:

1. No Risks

As a beginner, it’s confusing to navigate trading platforms. Fortunately, a trading simulator is a way to let new traders get comfortable in exploring how to buy and sell orders and test their strategies.

So, if you’re worried about risks, like losing your money, utilising a simulator is the right way to manage your trading account. At the same time, you look at other trading options, in case you haven’t tried them yet.

2. Strategy Development and Testing

As mentioned, using a trading simulator allows you to test and improve your strategies. Aside from improving your experience, you can also understand how the market moves. For instance, if the market is volatile, the simulator can train you on how to make informed decisions once you’re dealing with actual money.

So, if you don’t have any idea where to start, it’s best to explore the trading simulator, especially if you don’t have a concrete plan yet.

3. Develop Trading Discipline

It’s not a bad thing to get emotional while trading. However, it’s how you control your emotions that matter. While you improve your trading skills and strategies using the simulator, you also need to build your trading discipline.

Of course, you might think that there’s nothing to worry about when you lose from a simulator. However, since you’re testing your strategies, it can still become a problem when the time comes that you’re using actual money.

On the other hand, if you get too emotional every time the simulation result isn’t in your favour, you should look for ways to calm yourself without sacrificing your trades. Some of the common emotions traders encounter are fear, greed, and frustration.

4. Understanding Market Dynamics and Indicators

Aside from preparing your strategy, trading simulation also gives you an idea of how the market works. From time to time, observe the market trends and behaviour. In addition, you should try experimenting with various technical indicators, such as Moving Average Convergence/Divergence (MACD), moving averages, and Relative Strength Index (RSI).

As you know, it’s not ideal to learn trading by the book. Instead, you need to experience it hands-on. Fortunately, the simulator can provide the same experience without risking your actual money.

5. Building Trading Confidence

Becoming a confident trader is one of the factors that can help you improve your trading journey. Of course, being confident isn’t the same as being emotional. As a confident trader, you are familiar with all the features your trading platform offers, various tools, and trading options.

For instance, if you choose to trade using the TradingView platform, you should know the changes they made during their last update. In addition, you won’t have to hesitate when using the tools offered.

6. Real-time Experience

Although you’ll have to set the parameters when using the trading simulator, it can improve over time. The more you practise, the more you can experience real-time results as the simulator aligns with the up-to-date market data.

Once you get used to how the market works, you can make the necessary adjustments once you’re trading for real money.

Key Features to Look For in a Trading Simulator

Trading simulators are created differently, that’s why you should check the key features first before you choose.

Some of the key features you should look for include real market data, technical and fundamental analysis tools, asset choices, and various order types. Of course, if you require other tools and features to improve your trading experience, you should include them in your list.

Final Thoughts

If you’re looking for a great way to improve your trading experience and knowledge without risking your capital, you should try simulator trading. More brokers and trading platforms are offering trading simulators to help their clients.

If you want to share your experience using a trading simulator, don’t hesitate to share by commenting below!