Learn Options Trading with a Paper Trading Account First

At first glance, the work to learn options trading may be daunting to the individual investor. But you needn't worry. No one is a professional trader when they first start out. Everyone is inexperienced and needs to learn how to trade before they can master the market. The psychological impact of the fear of risk of loss can make the learning path particularly intimidating. But you can learn options trading without risk of loss. Quite the contrary.

In fact, you can learn options trading, developing and testing your own trading strategies in a real world environment, without risking a single cent of real financial loss.

Traders should learn options trading in a safe, stress-free environment, getting acquainted with the online trading procedures first in a paper trading account. A paper trading options account is an account that has all the real functionality of a real account and all the same price data, but the money traded is virtual—not real money. Hone your skills there in this virtual environment, and then, choose an options trading strategy to focus on that you’ll actually trade.

When you learn options trading with a paper trading account, your losses and profits are virtual. No financial risk is involved; you don't invest real money. That’s the key, and it’s important to gain this experience first so you’re prepared for the real world and can hit the ground running.

You can typically learn options trading by using a paper trading account with any options-friendly brokerage-trading platform, then open and fund a real account. Experiment, test, practice and explore. THEN and only then, is it time to start trading for real.

Learn options trading by placing virtual orders, tracking your account's hypothetical performance. This enables option traders to explore the idea-generation and risk management tools they’ll be using on the trading platform, as well as get comfortable with entering orders. You’ll make the silly mistakes you’re bound to make with fake money and be well prepared when it’s go-time and you have real money on the line.

Master the fundamentals of trading on paper, without risking any capital, until you learn how to make consistent paper profits. That was my path to learn options trading and it’s the best advice I give my students even to this day.

Dan Passarelli, Market Taker Mentoring

Trader Education