This is done by the manipulation of imaginary money and investment positions that behave in a manner similar to the real markets. Before the forex strategies 2012 movies use of online trading for the general public, paper trading was considered too difficult by many new investors. For example, investors can create several different positions simultaneously to compare the performance and payoff characteristics between multiple strategies.
A textbook may state that writing a covered call is synthetically the same as writing a naked put, but in practice there are subtle differences. Other advanced strategies include leverage, short-selling, forex and derivatives trading. Successful execution and profit generation from these strategies usually require high levels of technical knowledge. The imaginary money of paper trading is sometimes also called “paper money,” “virtual money,” and “Monopoly money. Stock market simulators can be broken down into two major categories – financial market simulators, and fantasy simulators.
Financial market simulators allow users to generate a portfolio based on real stock entries and help them train with virtual currency. Most of the currently active financial simulators use a delayed data feed of between 15 and 20 minutes to ensure that users cannot use their data to trade actively on a competing system. Some simulators can produce random data to mimic price activity. Fantasy simulators trade shares or derivatives of real world items or objects that normally would not be listed on a commodities list or market exchange, such as movies or television shows. Some simulators focus on sports and have been linked to active betting and wager based systems. Stock Market simulator engines can also be customized for other functions than just basic stock information tracking. Other applications that can be implemented with this software include popularity tracking and ranking from a set scale rather than an actual numerical value.