Once upon a time, not so very long ago, people had far less access to information. Often times people didn’t even have computers in their homes. Those who did have a computer at home likely did not have access to the Internet, or at least not in the same way that most people do today.
Even under these less than desirable conditions, people were still interested in the stock market and want to to learn about making money in it. In these cases, the only method available to those who wanted to practice stock trading was to use a paper and pencil. While it is not near as convenient as many of the electronic methods that are available today, this is a method that is still available.
You can make the system is complex as you like, if you want to practice stock trading using this method you simply need to get yourself a notebook and a pen and pick and amount you would like to start with. You also need to get access to some recent stock quotes, these can be had via television the Internet or, in many cases, your local newspaper. Depending how good you are at math, a calculator may come in handy as well.
Now, select a stock or several stocks that you would like to “buy” and make note of their current price. Determine how many shares it each you would like to purchase, and use your calculator to figure out how much it would cost you to purchase that many shares of that particular stock at its current price. Make note of this information in your notebook. For example X shares of whatever stock at whatever price as well as the total subtract this number from your beginning budget to better keep track of how much pretend cash you still have.
Your carper folio will now include however many shares of whatever stock or stocks, you decided to purchase as well as whatever remaining cash you have. At some point you may determine that the price of a given stock is at a point where you would like to cash out of that particular position. In that case, simply calculate how much cash you would get for selling whatever number of shares you currently have at whatever the current price is and add that figure into your cash total.
Over time, you will begin to see whether or not you are making or losing money and which stocks make good long-term investments. However, one thing to keep in mind when using this method is that there are several things that you’ll encounter in the real world that will not be reflected by this simple paper and pencil method of stock trade practice. Some examples of things I am referring to include dividends and broker fees.
While it might not be the most precise way to determine how well you would do in the real market, this cheap simple and easy way to practice investing is a good way to get started if you don’t have easy access to a computer on a regular basis.