How to Invest in the Virtual Stock Exchange

by Cindy Quarters

The term “virtual stock exchange” refers to online stock simulation games. New traders may use these games to learn how to invest in the real stock market, and some experienced traders use them to play the market for fun. Anyone can invest in the virtual stock exchange, focusing on stocks that exist in real life or various kinds of fantasy stocks, depending on personal preferences.

Choose a site that features the type of stock market investing you want to try. Virtual stock exchange sites are typically set up as games, so check out the rules before you sign up to play. Forbes.com recommends sites such as Marketocracy, Virtual Stock Exchange and Hollywood Stock Exchange.

Sign up to play by creating an account. These accounts are nearly always free, so if you are asked to pay for one, try a different site. Typically, you'll need to register with your name, email address and a password. You may also be asked for other information, such as your home address or ZIP code, but never give out financial information such as a credit card or bank account number just to register to play.

Start your game by choosing the stocks you want to buy. Online trading games start you off with a generous amount of virtual cash, usually at least $100,000 and in some cases up to $1,000,000 or more. This is your virtual money and it’s what you will invest in the virtual stock exchange. You can only spend what you have, but you’ll have plenty of money to start playing, and if you lose it all, you can start a new game. Virtual stock market games are a form of paper trading in which everything is simulated and winning or losing does not involve real money.

Invest all of your virtual money into stock, since it isn’t good for anything else. Feel free to experiment with different strategies, since you are not risking actual cash. Once you’ve developed confidence by playing the virtual market, you may wish to move to real investing.

Tips

  • If you want to learn how to invest in stocks and you are using the virtual stock market as a learning tool, focus on games that mirror actual stocks rather than fictional securities invented for the purposes of the game.
  • Some virtual investing games run contests where online players can win cash or other prizes, such as cars and vacations.

Warning

  • Success in the virtual stock exchange can indicate that you may do well in the real market, but there‚Äôs no guarantee you'll achieve the same result. Invest cautiously and be aware that you can lose all of your money in a stock market downturn, no matter how well you have done in the past.

Photo Credits

  • Thinkstock/Comstock/Getty Images