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Stock Market Simulators

6 September 2010 - News - Editor

Few would disagree that being a stock market player must be one of the most stressful, but also the most exciting, career paths to follow – especially in light of the global financial turmoil over the past two years or so. Have you ever wondered what it must feel like to win, or lose, a fortune as a result of a single decision? Or if slow and steady is your way, how would you best go about building up a comfy nest-egg by investing in the stock market? Before you leap into the world of high finance, you can test your aptitude for stock market trading, without any of the financial risk, by means of a stock market simulator.

As the name suggests, stock market simulators are software applications that simulate activity which would take place in a real stock market on a day-to-day basis, thereby allowing you, as the "player", the luxury of practicing trading stocks without raiding the piggy-bank. Stock market simulators can allow the player to build a portfolio of investments that are not real, and would not be listed on an exchange, using fantasy money to buy and sell. These so called "fantasy' simulators are just that, a fantasy, and while the principles of trading may be used in the game, it is not generally used as a precursor to the real thing. Financial simulators, on the other hand, allow the player to build a portfolio based on genuine stock entries, but using fantasy money. Financial simulators generally use a delayed data feed of a specified time, say 15 to 20 minutes, thereby ensuring that players remain in the simulator scenario and are not in the position to use their data to trade actively. Testing your skills on a financial simulator will give you a pretty good idea of whether you have an aptitude for stock market investing or not, bearing in mind that skills can be learned and perfected – so don’t give up too soon, it’s only fantasy money after all.

In the United States, students in primary, middle and high school are given the opportunity to participate in stock market simulator games in an effort to give them a grounding in real-world finance. Teachers have reported that these games, many of which run on the financial simulator principal of electronically relayed stock movement from real life exchanges are proving to be very popular among students, who are eager to get into class to check the performance of their stocks. Critics of this program are concerned that students are only getting a narrow view of Wall Street, with the focus on short-term profits and rewards for excessive risk taking. Moreover, with each participant starting off with the same amount of money, it is feared that students will not grasp the reality that life is not a level playing field and that wealth is very unevenly distributed out in the real world. On the upside, many students are mastering basic mathematics without even realizing it, and enjoying themselves while doing so – and there may very well be a Warren Buffett in the making, using the stock market simulator as training wheels.

 


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