I’ve been trading stock options for a long time. They are one of the most challenging business games that I have ever come across. They are potentially extremely profitable, but are unfortunately so risky that losing most or even all of your investment in a given position can happen very quickly. It’s one of those investments that demands a lot of research into how to achieve consistent profitability, and since it is so risky you’re better off treating it as an online business game that helps you hone your skills for a long time before you lose–I mean risk!–any actual money.
There is an approach that you can use to do just this, and it’s called “paper trading”. Even seasoned investment professionals will do this if they come upon a new financial indicator that they deem worthy of testing, as a way of finding out if the indicator can be used as a tool to increase investing profitability. Everyone looks for reliable indicators or combinations of trading signals that can move them closer to the holy grail: making money consistently.
The mechanics of paper trading are pretty simple; rather than actually placing trades with your online broker, you watch your trading platform just as just as you would if you were really trading and simply pick a point at which you’d like to enter a position by making a note of the trade rather than actually entering in a buy order. Do the same when you exit the position, whether it’s for a gain or a loss.
In this way you maintain a practical connection with the real-world options or stock market as you test your new business theory or financial indicator. Many people find paper trading more worthwhile than other online business games because it has potential application in real life. It’s very possible that you will find a reliable trading indicator through your paper trading, which you can then use in your actual investing strategies.
There is a whole range of challenging online business simulation games available on the Internet, certainly. Activities like team building games, money management and other money games are absolutely worth learning about and practicing. But for applying business theory to real-life situations, one should not underestimate the value of paper trading as one of those free business games that is a method of increasing returns in your actual investment portfolio.