Are Stock Market Games a Waste of Time? (5 Pros & 2 Cons)

Key Takeaways:

  • Stock market games provide a risk-free environment for learning to trade
  • They allow you to practice investment strategies and gain valuable experience
  • They have a wealth of learning resources
  • Seeing positive results and achieving investment goals build up your confidence

So, you want to learn how to trade, but you don’t know where to begin? Luckily, there are many starting points, and stock market games could be the best ones for you. 

That’s because they’re, surprisingly, a pretty good way to learn the ropes without risking real money. Yes, they’re free, and they’re like practice runs for trading, right? 

Sure, they perhaps don’t give you the same adrenaline rush as real trading, but they help you understand how markets work, how to research stocks, and how to make decisions without suffering financial ruin. 

They also come jam-packed with educational resources, tips and advice, quizzes, rankings, and real-time 24/7 trading. 

And, my personal favorite, you can do all of this on your phone while you’re commuting, on the can, watching YouTube, or whatever else you do these days. 

So, let’s see what the pros and cons of stock market games are and how they can help or distract you from reaching your financial goals. 

Pros

1) Risk-free learning 

You know how, when you start a new video game, you dive into a tutorial that holds your hand every step of the way? 

Well, stock market games are the same. They’re like video game tutorials for investing

Among other things, they show you how to buy and sell stocks with fake money, usually $100,000. Yeah, that’s a lot of cash, isn’t it? 

But having that much money often doesn’t represent the real world. For example, I had around 2,000 real dollars for trading at the time, and that’s how much fake money I invested in the game, too. 

I then made a second account where I’d YOLO all of the fake cash I had at my disposal, lol. 

But ultimately, both accounts fulfilled their purpose. I learned how the stock market moves, what influences the stock prices, and how different events impact market trends. 

I also developed my research skills, started paying more attention to market news, and learned how to read charts better, all without spending a dime (of real-world money, that is). 

And most importantly, I started learning from my newbie mistakes

2) Realistic experience 

The best stock market games out there strive to mimic real market conditions. That’s why you encounter dynamics similar to those of the actual market, such as buying and selling stocks, tracking portfolio performance, and reacting to news and events.

You’re getting the taste of something that’s extremely complicated and terrifying to 99.99% of people. 

You’re also demystifying this experience for yourself and getting the hang of it fairly quickly. 

Plus, by getting to know market dynamics, investment principles, and risk management techniques, you can approach real investing with greater confidence and competence. 

3) They help you practice strategies 

Beginner traders are mostly clueless about the different trading and investing strategies that exist. 

Sure, they can read about them on websites like this one, but that doesn’t involve any practice. And we all know that you learn best by practicing. 

That’s why all athletes practice for up to 8 hours each day for competitions. They don’t just show up on Sunday to play the game. 

The game on Sunday is just the result of their everyday blood, sweat, and tears (and performance enhancers). 

The same goes for us traders. We learn the ins and outs of trading and everything surrounding it. Each trade should reflect what we learned up to that point. 

And stock market games help us learn and implement trading strategies. Each strategy has its own set of risks, rewards, and considerations, and that’s why you need to understand the nuances of each approach before using them in real-world trading. 

For example, scalping is much different from day or swing trading. Plus, when you have a day job, you don’t want to spend all your free time looking at charts. 

4) Access to resources 

Stock market games often offer tutorials and quizzes that cover a wide range of topics related to investing, trading strategies, charts, financial concepts, etc. 

“Risk comes from not knowing what you’re doing.” 

Warren Buffett

There’s really a depth of knowledge there for anyone willing to learn. Both complete beginners and somewhat experienced traders can benefit from it.

For example, the Pattern Sniper Quiz can help you learn how macroeconomics, politics, and news affect different assets. 

Pattern Sniper Quiz

In it, you also learn how to determine price moves by analyzing historical chart patterns and indicators. 

All of these resources are there to help you become a smarter investor, whether you’re just starting out or looking to level up your game. 

They make learning about money and investing a lot more fun and less intimidating.

5) You build confidence

Just like with anything else, the more you practice investing in a simulated environment, the more confident you become in your abilities. 

As you see your virtual assets grow, you start feeling more confident about making smart choices in the real stock market. 

When I first started learning through a stock market game, I got the most confidence by simply playing around with different stocks and seeing how they perform. 

As time went on, I started to get more confident in my ability to pick stocks and make smart choices

But let’s talk now about some of the cons. 

Cons

1) No real consequences 

If you don’t approach these games and trading simulators with the right mindset, you’ll just be playing a video game and won’t extract any lessons. 

As there are no real financial consequences for your actions, there’s no pressure to make careful decisions. You can YOLO every trade and hope for the best. 

You’re basically taking risks you wouldn’t otherwise take in real life and if real money was on the line. 

And without grasping all the risks that come with trading, you create a disconnect between your experiences in the game and actual financial markets. 

That’s why I made two accounts, as I already mentioned. One was for actual learning, and the other was for scratching that YOLO itch and experimenting.

2) Lack of emotional impact 

Without the emotional rollercoaster of real investing, you can use stock market simulators more stress-free and relaxed. 

“The four most dangerous words in investing are: ‘This time it’s different.'” 

Sir John Templeton

This is obviously and by far a more enjoyable experience that encourages you to explore different strategies without worrying if you’ll have enough money for dinner tomorrow. 

You can focus more on the learning aspects of these games as opposed to making money right out of the gate. 

But, and there’s a big but.

Investing in the real world involves managing emotions such as fear, greed, and uncertainty.

Stock market games don’t prepare you for the grueling and psychological challenges of real investing. 

They can also lead to overconfidence in some traders as they overestimate their skills and knowledge. 

Bottom line

So, what’s the conclusion here? Are stock market games just a huge waste of your precious time? 

No, not at all. They’re a useful starting point for learning about trading and investing. You should also view them as one part of a broader educational journey. 

Combine them with real-world knowledge, hands-on practice, and a bit of mentorship, and you’ll be better prepared to tackle the financial world with confidence.

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