We already invest in mutual funds, but I'm interested in learning to invest in individual stocks.

I've heard and read quite a bit about "paper trading" for a while to learn. What information do I need to track to "paper trade"?

Trading != Investing.

Your VERY first step needs to be to understand that distinction.

When you were a child, you probably had training wheels on your bike.

UNLESS you "were born with a silver spoon in your mouth", when you had your first job,you didn't start at the top. You were trained, nurtured or broken-in, weren't you? Sure you were.

Paper trading/Virtual trading is the same thing. You train yourself. You have training wheels or a safety net under you. You don't risk any of your hard-earned money. You experiment.

The purpose of paper trading or virtual trading is for a trader/investor to test his/her trading rules for a particular strategy.

Before going "live - in the market" with your hard-earned money, you want to make sure you know what you're doing and how to do it. As far as trading is concerned, it's one of the the wisest things to do.

UNLESS YOU MAKE YOUR OWN RULES AND FOLLOW those rules, you'll get into deep financial trouble and be eaten alive by the market.

What kind of a trader are you - or do you think you are? How long do you stay in a trade or hold stocks for?

What kind of research do you do about those "great tips" you see and hear about from various sources - the TV, radio, friends, family, and get in the mail?

Do you have a minimum price you will not go under?

Unless you have LOTS of money, what is the limit per share you will pay for a stock?

How much volume must a particular stock trade per day to meet your minimum volume requirement?

Do you check the news about each of your investments?

The list is almost endless. BUT "THE trading rules" YOU make and follow dictate whether or not that trade meets your investment criteria or if you should kick that particular stock to the discard pile - until another time or permanently discard it.

Some of my trading rules are:
1. ANY stock I consider trading MUST have a price of at least $26.61 cents per share. Anything less than $26.61 is simply ignored.

2. ANY stock I consider trading MUST have options. When it doesn't - I simply forget about it.

3. ANY stock I consider trading MUST CONSISTENTLY trade AT LEAST 600,000 shares or more per day for at least the three most recent months. When it doesn't - see ya!

4. For most of the stocks I trade, earnings occur about every 3 months or 4 times per that company's fiscal year. I won't consider trading any stock within 7 business days of that company's earnings announcement date.

5. I won't consider trading any stock which declares dividends or announces splits.

6. I WON'T trade any IPOs - Initial Public Offerings. Why? There simply isn't any history.

I have other rules. In fact I have about 7 strategies. AND I have rules for each strategy.

In brief, what am I doing? I'm looking for reasons NOT to get into a trade. I don't need reasons TO GET INTO A TRADE. If I wanted that, I would just go with my "gut feelings".

It requires work. Yes, I made mistakes. Yes, I continue making mistakes. BUT I DON'T make the same mistakes over and over again. I learn from my mistakes. When you start trading ""live - with real money", you'll make mistakes, too. I HOPE you don't. BUT EVERYONE makes mistakes. BUT that's what paper trading/virtual trading/pretend trading is for: To test your trading rules. Then "tweak" those rules.

A SIMPLER WAY TO TRADE:
This is what I learned about the stock market and trading:
1] I read a little about the overall market and how it works. I read about different aspects: mutual funds, currency, commodities, stocks and options.

2] I asked Qs of my coaches and mentors; suggestions were made to me.

3] THEN I read and studied about those areas which interested me.

4] I concentrated on those areas which interested me and which fit the amount we had to work with.

5A] For those strategies I felt comfortable with, I developed trading rules. For those strategies I didn't know anything about, I developed some trading rules.

5B] I discovered I only needed trading rules for 4 to 8 trading strategies. BUT I continue learning - every day.

6] Using those rules, I paper traded.

7] When trades went against me - when I lost money - I adjusted or "tweaked" those rules for that strategy.

8] I paper traded - again and again and again and some more.

9] I made further adjustments.

10] I’ll admit I didn’t do enough research for the right broker for our trading needs, wants or desires. However, the one we decided to go with is OK – but not the greatest AND definitely not the least expensive. Yet, the actual trading account was opened:
As a speculator, with margin, with the approval to trade options.

11] Yes, it was VERY scary AND I was VERY apprehensive: BUT, I MADE THE BIG JUMP: Going "live" - in-the-market - with real money. I lost some money. NO ONE ever succeeds in each and every trade 100% of the time.

A] BUT I didn't use the entire amount of the account's money on one trade. I learned HOW TO properly manage the money in the account.

B] I lived to trade another day. AND I continue learning and living to trade other days.

C] AND YES, I STILL have a few losing trades. BUT my winning trades are A WHOLE LOT more than the losing trades.

Thanks for asking your Q! I enjoyed answering it!

VTY,
Ron Berue
Yes, that is my real last name!

Sources: My wonderful family!

My wonderful coaches and mentors!

TWO [2] of THE ABSOLUTE BEST, MOST wonderful trading groups in the world, which I am most proud to be a member of!

Trading stocks and options more than 2 years.

"THE University of Hard Knocks"

Talk to a local stock broker. The small commision you pay will provide much more security and peice of mind. With a broker you may pay 6% commission. But if youearn 21% you are still making a 15% profit. Whereas if you invest on your own you risk losing alot and maybe only making a 6% return. Even if yougota 4% returnm you would be better of investing in a Certificate of Deposit. Plkus if the broker messes upyou have somebody to complain toand youdont have to be upset with yourself. My advice get a broker.