Paper Trading

Podcast Duration: 05:34

Hello doston, angel broking ke is podcast mein aapka swagat hai.

Doston, kya aapne paper trading ke baare mein suna hai? Nahi?

Even if you haven’t heard this word in your life, chances are ki aapne paper trading kabhi na kabhi try zaroor kiya hoga, ya fir internet par iske ads dekhe honge.

Still can’t remember? Am I confusing you?

Maybe not. It’s just that paper trading ko log is naam se nahi jaante.

Chaliye ek trading 101 class ke discussion par eavesdrop karte hain.

Doston last year, Akhil and Nisha were taking a stock market trading bootcamp online. During a live class, akhil ne tutor se bola, ki he is formulating a lot of strategies to apply in the share market. Uski risks appetite high hai, lekin he doesn’t want to lose his money.

Usne apne tutor se bola ki woh apne strategies ko test karna chahta hai. Iske liye, usne ek excel sheet banayi, jispar woh apne investments ko track kar raha tha - not in reality, but usne ek din assume kiya ki he had purchased stocks worth 1000 dollars - not of one company, but a proper portfolio of five stocks.

Nisha pitched in. She said ki doing this on an excel sheet is such a headache. She had a point though. Agar woh trade karna seekh rahi hai, toh why should she have to learn how to track a portfolio on an excel sheet?

Usne tutor se bola ki kya aisi companies nahi hoti jo trading ke liye games ya apps develop karti hon?

The tutor said that’s very smart, and actually, this is very possible. Usne Akhil ko excel sheet ka idea drop karne ke liye bol diya.

Doston, kya aap already samajh gaye ki paper trading kya hoti hai? Don’t worry. Agar nahi, toh that’s what we will look at, during this podcast. Iske baad we will also look at some positives and negatives of paper trading.

Doston, Akhil ka idea wasn’t bad, was it? Paper trading actually refers to what Akhil was trying to do. Market mein enter karne se pehle kai investors and traders real trading ka ek simulation dekhna chahte hain. Iske peeche kai reasons ho sakte hain - trading strategies ko try aur sharpen karna, ya fir simply textbook knowledge ko test karna.

Darasal Akhil ka idea wasn’t bad at all.

Even before computers were invented, traders have been paper trading.

Guess where?

Well obviously on paper! Sounds funny? Doston, we are actually very serious.

Before computers were used, where else would the investor simulate the records of their trade, and how would they track it?

They used to write down details like these, and then wo continuously is paper par prices update karte the, at regular intervals.

Paper trading ka name comes from this actually - trading on paper, not in reality.

Doston, all of us have thought of simulating what our trading strategy would look like in the live markets, hai ki nahi?

Well, aaj aapko paper trading ke liye paper ki koi zaroorat nahi. Take the green alternative and save paper, I would suggest.

Aaj agar aap apne trades ko simulate karna chahte ho, toh many brokers and websites provide paper trading accounts - jispar aap trade kar sakte ho like real traders do.

Doston aap paper trading ke benefits toh samajh hi gaye hoge. Not only is paper trading an exciting thing to do, but it is an excellent way to test the waters.

Doston paper trading mein real trading ki tarah risk nahi hoti, because you don’t actually lose any money if your trade goes against you. That’s the first benefit.

Second benefit - paper trading se aap real trading ki practice kar sakte ho. Lekin isme aapko honestly apne goals decide karke real world ki tarah markets ko approach karna hota hai. Otherwise, you might just be playing a game. Is simulation ko real world ki tarah treat karna aapki responsibility hoti hai, because only then can you get some real practice.

And lastly - paper trading mein apni strategies ko achcha perform karte hue aapka confidence badhta hai. Saath hi, you also see the statistics in front of you - then you can understand ki aapki kaunsi strategies aren’t working, and which ones are.

Lekin doston, paper trading ke kuch downsides bhi hain - for example, because paper trading mein real risk nahi hoti, people often miss the emotional effect of a sinking investment. Is perspective se, paper trading cannot teach you how not to panic sell in distress.

Another downside of paper trading is that isse aap real world trading ke parameters par miss out kar sakte ho. For example, agar aapne 60 rupees ke 2000 stocks khareede, toh they might actually cost you 62 if you were trading in the real world.

What’s more, paper trading mein aap shakeouts jaise real-world events ko simulate hote nahi dekh sakte.

Lekin doston, regardless of this, paper trading is an excellent way to get started and get more real about trading, if you have been thinking about it but haven’t managed to start yet.

Toh der kis baat ki hain janaab?

Pick some of your best and go-to market strategies and start practicing trading, like you were doing it in real.

And don't worry! Agar aapko koi star strategies ya prior experience nahi hai, uske baad bhi you can still try paper trading - just keep one thing in mind - paper trading mein aap jo profits aur gains dekhte ho, they should be driven by strategies rather than chance. Paper trading se sirf is condition mein hi aapko practice mil sakti hai. Imagine ki aap jo bhi decisions ek simulation ke andar le rahe ho, wahi decisions aap ek real-world scenario mein bhi loge.

Sounds cool, doesn’t it?

Friends, if you want to know some more cool stuff about markets and trading, don't forget to visit us at Toh friends, aaj ke podcast mein bas itna hi.

See you in the next one. Until then, don’t stop practicing, and keep the learning going.