- 1). Find a stock simulator. A few that you can consider using are Investopedia, WallStreetSurvivor, and the Virtual Stock Exchange at MarketWatch (see resources below). These programs are all free to use as of 2010. They will simulate a real time stock market trading environment.
- 2). Enter Trades. As basic as it may sound you will need to practice entering trades in real time. Many beginning traders will enter incorrect information, making simple mistakes like entering a sell order when they meant to buy, or vice-versa. You will also need to practice putting in stop loss orders.
- 3). Begin by choosing the type of order that you wish to place. You will be able to choose from a market order, a limit order and a stop order. A market order executes the trade immediately at the stock's current price. A limit order opens a trade at a specific price. A stop order will open a trade and become a market order once the stock has hit a certain price.
- 4). Enter your stop loss. This is a way to protect your capital by closing the trade if it goes too far in the wrong direction. You will need to set the price at which you wish to close the trade. A good rule of thumb is to not let the stock drop by more than 20% to 25% from your entry price. So if you buy a stock at $50 and it drops by $10 or more, you can enter a stop loss that will automatically close the trade off before you lose any more money.
- 5). Exit trades. Once you have entered a trade you need to figure out how to exit it. To do this you will need to set a limit price at which to close the trade. A good way to figure out what exit price to set is to look at the highs of the stock set over the past few months and set your exit price about 10 to 15% above this. So if the stock hit a high of $50 you would set your take profit limit order at somewhere between $55 and $60.
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