Trading Simulator
Practice trading in a risk-free environment with our real-time virtual portfolio tracker.
Trade Setup
Trade Results
Portfolio Impact
Why Use a Trading Simulator?
A trading simulator, commonly known as a paper trading account, allows you to build confidence and test trading strategies without risking real capital. It provides a sandboxed environment where you can experience real market mechanics.
How the Math Works
Understanding the exact formulas used in trading is crucial for managing risk and setting realistic expectations. Here's how the simulator calculates your results:
1. Gross Profit/Loss (Long Position)
Gross P/L = (Exit Price - Entry Price) × Number of Shares For a short position, the formula flips: (Entry Price - Exit Price) × Shares
2. Total Trade Cost
Trade Cost = Entry Price × Number of Shares This represents the capital tied up in the trade (excluding margin leverage).
3. Net Profit/Loss
Net P/L = Gross P/L - (Commission × 2) Commissions are typically paid on both entry and exit, so the fee is multiplied by two.
4. Return on Investment (ROI)
ROI = (Net P/L ÷ Total Trade Cost) × 100 This gives you the percentage return relative to the capital risked on the trade.
Common Simulation Strategies
- Day Trading: Practice opening and closing positions within the same trading day to capture short-term momentum.
- Swing Trading: Hold simulated positions for several days or weeks to profit from anticipated price swings.
- Risk Management: Use the simulator to calculate exact position sizes so that a single loss doesn't exceed 1-2% of your total account balance.
By treating the virtual money as if it were real and strictly following your rules, a simulator becomes the most valuable tool for transitioning into a consistently profitable trader.