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Best Options Trading Simulator: Learn to Paper Trade with Felix Prehn

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Goat Academy

Published on June 23, 2024

Best Options Trading Simulator: Paper Trade Options with Felix Prehn

Felix here, and today I’m tackling one of the most popular questions I get: how to set up paper trading and why you should use it. Whether you’re in North America or anywhere else in the world, I’ve got you covered with the best options trading simulators. Let’s dive into the specifics and get you started on your paper trading journey.

What is Paper Trading?

Paper trading is simulated trading, akin to using Monopoly money, but the trades behave as if they were real. It’s an excellent way to learn and refine your options trading strategies without risking actual money. Even as an experienced options trader, I use paper trading to test new strategies or trades. It’s a smart move to learn from mistakes without any financial risk.

Best Options Trading Simulators

For North America: TD Ameritrade’s Thinkorswim

If you are in the US, Canada, or some other American countries and places like Singapore, TD Ameritrade’s Thinkorswim platform is your best bet. Here’s how to get started:

  1. Open an Account:
    • Visit tdameritrade.com and open a new individual account.
    • Fill in the necessary details, but you don’t need to provide ID or proof of address just for paper trading.
    • You will receive login details via email, giving you access to the paper trading account.
  2. Using Thinkorswim:
    • Log in to Thinkorswim and select the ‘Paper Money’ option.
    • Enter the stock symbol (e.g., AAPL for Apple) and choose your desired options trade from the options chain provided.
    • Customize the trade details, such as expiration date and price, then review and send the trade.

Worldwide: Interactive Brokers

For those outside of North America, Interactive Brokers is a robust alternative, available in most countries worldwide. Here’s how to get started:

  1. Open an Account:
    • Visit interactivebrokers.com and create a new account.
    • Complete the application process, which might require some additional information compared to Thinkorswim.
    • Consider depositing a small amount (e.g., $100) to expedite the account opening process.
  2. Using Interactive Brokers:
    • Log in to the Interactive Brokers portal and select the ‘Paper’ trading option.
    • Note that paper trading is not enabled by default. You need to request it via a call or chat with their support team.
    • Once enabled, you can start simulating trades similar to a live environment.

Key Benefits of Paper Trading

  1. Risk-Free Learning: Make mistakes without financial consequences and refine your strategies.
  2. Strategy Testing: Try new strategies and see how they perform before investing real money.
  3. Confidence Building: Gain confidence in your trading skills and strategies through practice.

Conclusion

Paper trading is an invaluable tool for both novice and experienced traders. Whether you’re using TD Ameritrade’s Thinkorswim or Interactive Brokers, these platforms provide a safe environment to learn and test your trading strategies. By mastering paper trading, you’ll be better prepared to tackle the real markets with confidence.

For more detailed guides and resources, visit Goat Academy. Happy trading!