Basically, virtual stock market is a simulator stock market. Its main goal is to help a new trader learn the basics of online stock trading. It is some times referred to as fantasy or paper trading. These systems reduce the chances of a newbie loosing money once they start trading.
Generally, most websites that have a simulator trading platform also have a real trading platform where one can buy and sell shares at a profit. This platform is usually similar to the fantasy one except that the virtual one is not real. There are also websites that have fantasy markets from which one can actually profit from. Through these sites, one can put in seed money just like the real markets.
To make profit in the fantasy trading, you must be able to understand technical analysis. Most websites have indicators which will help you determine whether the prices will move up or down. Most paper trading system use statistical analysis for determining what price a stock will be at one particular time. There are though others that use actual feeds from the main market.
Most fantasy trading systems have a number of indicators that will assist in technical analysis. Some of the most common indicators available include candlesticks, trend and moving averages. Knowing how to use these technical analysis indicators will be vital in helping you earn profits.
This market will potentially prepare you for the real thing. As much as this can help you profit, the case is completely different where real money is involved. Greed and fear are emotions that are real when it comes to trading shares.
A major difference between these two systems is that in the real thing, real money is involved while in virtual one, virtual money is involved. Profits and loss you make when trading fantasy systems are not real. Mostly, the fantasy platform will give seed money to trade with, usually not real money.
Similarity between the two systems is that both use similar indicators and that trading techniques in both systems are the same. You will find that a number of websites have the same platform that is used in the virtual trading. This helps acquaint traders before joining the real market.
Basically, the essence of using fantasy trading is to get you acquainted to trading stocks online. This system greatly improves your proficiency with the platform plus you learn to use indicators. Other vital skills you learn from these systems are money management skills and how to use fundamental analysis to enter or exit trades. These skills are what will determine whether you become profitable when trading stocks.
It should be noted that trading stocks is a risky business and you could lose a lot of money in a short time. Before you can even think of investing in this field you must have enough training. Once you are comfortable that you can make profit in trading online, you can now start trading. It is also important that you only trade money you can afford to lose.