The internet has made it easier than ever to be an investor. However, there are pros and cons to this. The upside is that a record number of people have access to the markets. The downside is that a whole lot of people have no idea what they’re doing. And jumping head-first into a random stock can be costly… when they’re playing with real money. Because there’s a big difference between investing and speculating.

This is where stock trading simulators can be beneficial. It’s the perfect way to test a trading strategy before finding out it doesn’t work… and losing your shirt.

The stock market is one of the greatest wealth-creating machines humanity has ever seen. But not everybody who throws a few bucks at some stocks will see a return on their investment. And the recent onslaught of new investors has proven that to be the case.

At the beginning of 2020 online brokers like TD Ameritrade, Charles Schwab and Robinhood reported spikes as high as 170% in new accounts. And a lot of people who jumped into the markets at exactly the wrong time – they didn’t actually know what they were doing – watched their money evaporate.

For every “overnight millionaire” story, there are hundreds of people who watched their nest eggs get fried because they took on too much risk. They skipped due diligence and followed their impulses.

Instead of blowing a bunch of money to see whether you’ve got a knack for this investing thing, it’s a lot easier (and cheaper) to test a theory on a virtual market. So before betting on a pennant chart leading to a big win or following a sawtooth pattern to time the market, assess your strategy. Let it play out in real time on a stock trading simulator.

This will make you a better, wiser investor in the long run. And developing an understanding of how the markets work will reward new investors with an education to last a lifetime.

The Five Best Stock Trading Simulators

Here are the five best stock trading simulators we’ve tested recently:

Coming in at No. 5…

NinjaTrader has an exceptionally robust toolbox available to its users. And while this trading service has a proper brokerage service, its stock trading simulator is just as expansive. Users can back-test their strategies, run real-time screeners and do some advanced charting. Among its most interesting features is the ability to turn back the clock and see how you would have done in different time periods.

The only mark against it is that NinjaTrader’s free simulator requires a download and isn’t simply available online. But the process is still straightforward, and it’s easy to get started. You just give your email address, and you’ll be set you up with temporary login credentials once the download is complete.

At No. 4 Is…

HowTheMarketWorks.com has been around for a while, but the oldies can still be goodies. Setup is simple. You just make an account, decide how much cash you want to start out with in your account and get trading. The tabs at the top of the dashboard offer a glimpse of your virtual portfolio. And that’s where you’ll find the place to start trading. It’s all straightforward and looks similar to many brokerage accounts.

This stock trading simulator also features the ability to set up a trading game with friends to compete for the best returns. This is an ideal platform for new investors because of the vast array of educational material it contains. The major drawback is that this simulator features the ability to trade only stocks and exchange-traded funds (ETFs) – no options or futures trading is available.

At No. 3…

[gated-content list=’INVESTME’ headline=’Keep Reading This Article and Find Out the Top 3 Stock Trading Simulators!’ body=’

Enter your email below to read the rest of this article and reveal the Top 3 Stock Trading Simulators.

You’ll also be opted in to receive our free daily e-letter, Investment U, where you will find our expert investment insight, analysis and stock picks for all the best investment opportunities.

‘ button=’Unlock The Rest’ mvid=’1516177′ coreg=’274702′]

Thinkorswim is an educational tool developed by TD Ameritrade. Since this full-service brokerage is one of the best in the business, it’s no surprise that its stock trading simulator is impressive. Once you set up a Thinkorswim account, you can choose what kind of securities you’d like to practice with. You’ve got equities, options, futures, forex (foreign exchange) markets and ETFs to choose from. Once your account is set up, you’ll be prompted to download an application where the trading begins.

Since this stock trading simulator was designed by an actual broker, it should be no surprise that it looks about as close to the real thing as you can get. And again, the only drawback is that it does require a download instead of being able to be used right in a web browser.

Coming in at No. 2…

The MarketWatch stock simulator is the one we use here at Investment U to compete with each other. So it’s got a special place in our collective heart. The sign-up process for this one is a little more cumbersome than some of the others, but if you can follow Ikea directions, this’ll be no sweat.

You have to start by setting up a custom game. You select how many players you want involved (or just play by yourself), and then you choose the indexes you plan to access (the default will work for most people’s purposes). Then you choose the starting balance in your account and select which trading choices you’d like to have access to.

When the game is set up, select the “Portfolio” tab and start trading. Simply drop in a ticker symbol, decide whether you want to buy or sell short to start, and choose how many shares you’d like to start with. As an added bonus, you’ll have instant access to MarketWatch’s robust overview of any stock you choose. You just select the “Full Quote” page, and it will direct you to an overview of any stock’s pertinent information. The one bummer is that this stock trading simulator also doesn’t offer options trading.

And the No. 1 Spot for Best Stock Trading Simulator Goes To…

Wall Street Survivor is like a gussied-up version of HowTheMarketWorks.com. It has a lot of additional features. Once again, setting up an account is simple. You just create a login and provide an email address, and you’re pretty much ready to start trading.

Once your account is set up, go up to the “Portfolios” tab at the top and start adding stocks to your portfolio. All you have to do is drop a ticker symbol in the search and select “buy.” From there, you’ll be allowed to buy, sell, short or cover any publicly traded stock – virtually. Like many of the others, Wall Street Survivor also allows users to easily set up stock trading games with friends, family or classmates. There are also scores of games going on that you can join. If you do set up a game to compete with others, you can also employ options trading – which puts this a cut above the others.

Ready to Start Trading?

There’s a famous story about the legendary hedge fund manager Ray Dalio. At age 12, he bought shares of Northeast Airlines right before it merged with another company. On his first trade, he tripled his money. Most of us aren’t quite so lucky, which is why it’s so important to develop a sound investment strategy… before you actually start investing. This is where stock trading simulators come into play.

Some investors get lucky. Some don’t. But there are scores of smart ways to go about investing. Nonetheless, it almost always makes sense to but your investment theories to the test before jumping in whole hog.

Read Next: What Is Options Trading and How to Get Started[/gated-content]