questions about paper trading

Discussion in 'Ask any question!' started by ineed2makemoney, Jun 11, 2022.

  1. ineed2makemoney

    ineed2makemoney New Member

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    hello i paper trading on investopedia and i have a question. how do you win or lose money? lets say you bought 4 shares of amazon for 122.45 and thats 489.8 and it goes down to 120 a share - thats only a 4 dollar lost, am i correct? also how do you set up stop losses? i put the order in and it took awhile for them to make the move.
     
  2. StockJock-e

    StockJock-e Brew Master
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    Technically you have not lost anything until you sell.

    Play around with your paper trading account, that is why it exists!
     
  3. ineed2makemoney

    ineed2makemoney New Member

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    ok but can you answer this question. lets say you bought 4 shares of amazon for 122.45 and thats 489.8 and it goes down to 120 a share - thats only a 4 dollar lost, am i correct?
     
  4. Value543

    Value543 Well-Known Member

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    No, you are not correct

    122.45 buy - 120 sell = 2.45 loss per share
    2.45 x 4 shares = 9.80 total loss
     
  5. ineed2makemoney

    ineed2makemoney New Member

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    ok lets say it rise to 130 a share and i sell would that be 520? that would be only 31 dollar profit?
     
  6. ineed2makemoney

    ineed2makemoney New Member

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    oh yeah youre right. idky i was thinking the total was 484 when it was 489. anyways so how do you actually make money on there? you'd have to invest like thousands and thousands of dollars just to make a few hundred profit. ok lets say you bought 100 shares of amazon for 122 that would cost 12200 and it rise to 130 a share thats 13000? the more you invest the more profit you can gain right?
     
  7. Value543

    Value543 Well-Known Member

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    The math works the same way:

    Price Sold - Price Bought = Profit/Loss
    Profit/Loss x Shares = Total Profit/Loss
     
  8. Value543

    Value543 Well-Known Member

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    No, to "make a few hundred" off a stock that moves a few dollars in price, you would only need to invest a few hundred. A $2 move that happens with 200 shares is $400.


    Yes -- and conversely, the more you can lose.
     
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  9. ineed2makemoney

    ineed2makemoney New Member

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    yeah so one would have to stick with very cheap stocks if they dont have much money right? the more shares you own the more profit you can gain when you sell off a stock that moves up a few dollars. can you tell me how to set up stop loss? i put in the order but it took awhile for them to execute the order.
     
  10. Value543

    Value543 Well-Known Member

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    With the advent of "fractional shares," you do not need to stick with very cheap stocks.


    Every platform is different: 1) contact your platform; and/or 2) YouTube search "How do I set up a stop loss order on <insert your platform here>" ...the Internet is an amazing thing...it allows you to do your own research, as opposed to asking random people questions you can find the answers to yourself ;)


    All that said, if you're entering the market as an alternative to gambling...or...you're entering the market with a certain "amount" you want to make off each & every trade (or any trade, frankly)...then I recommend against entering the market whatsoever. In short: you will lose. The added pressure you're putting on yourself to either get rich quick, or hit a certain dollar amount, will lead you to make bad trades, stay in trades too long, trade in high risk or speculative companies, or all of the above.
     
  11. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    I'm not sure, but sometimes paper trading accounts are not up-to-the-second live; they may have a 15-minutes delay.
    Ultimately when you do actual trading, be assured the moves will be instantaneous.

    Regarding trying to make big money from a small account, using stocks: as a starter you want to find stocks with high beta.
    I mean beta is no guarantee but I don't want to say high volatility because volatility has several meanings in the stock world.
    TSLA was the prime example of a huge company, not a penny stock, that could make you big money fast. The thing that TSLA had was high beta.

    $30 may not seem like much, but it is way better than a savings account. You can play bigger but they come with 100% blowup risks (futures, options).
     
  12. ddebrazza

    ddebrazza Active Member

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    No. I used to wonder about this also. It all comes down to PERCENT CHANGE. Obviously the more capital you have to play with, the less movement you will need in order to make money. I.e, you have $10,000 and you have a 1% day or 100$ profit. Making 100$ each day would be solid to some people. But if you only have $1,000 you'll need to get a 10% movement up to get that same 100$ profit.

    With cheap stocks you just own a greater number of the stock but it is still all about the percent change in price. If it goes from 1.00 to 1.10, that's 10% gain. 0.10cents per share profit. Vs. if you own a put that same 100$ into say a 1000$ stock and owned 0.10 shares, the 10% price movement, from 1000$ to 1100$ would result in you getting 10% of 100.

    The math works the same. Percent Change applies to Crypto Assets as well.
     

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