To using a trading simulator, or not? That is the question. It’s a big question. There’s Pro’s and Con’s to both sides of the argument when it comes to this somewhat divisive topic. Some say that trading simulators are useless, while others say that you should use a trading simulator for a year or two before going live.

I’ll be honest, I am biased towards not using a trading simulator. At the very least, I think a trading simulators extent of use shouldn’t exceed longer than it has to be. I think you should be in the live market as soon as possible. There are many things that a trading simulator cannot simulate.

I’ve made a list of things to consider when deciding to use a trading simulator. Enjoy.


Pro #1 – You Won’t Be Risking Real Money

If you’re brand-spanking-new, this can be a big consideration when choosing to use a trading simulator or not.

In fact, if you’re brand new, you should definitely start on the simulator. You aren’t going to have any direction or any idea as to what you’re doing. But personally, I wouldn’t stay on it for an entire year, like some people profess.

In fact, if you’re new to trading learning to trade Options can be a great place to start. Not a lot of people have bothered to learn how Options work, which is a huge “edge” to those who understand Options… even if you have no plans for trading Options, it will give you a huge advantage over your competitors. Click here for more info.

Options aside, a trading simulator is a good tool to get your bearings, but as far as actual gaining actual practice and experience… well we’ll get into that in a moment.

Pro #2 – Helps You Get Familiar With A Platform

This is probably the biggest reason to a trading simulator.

If you’re new to a trading platform, you don’t want to be blindly clicking around on buttons when you aren’t sure what they do– especially if your account in fully funded.

You want to be able to get yourself familiar with what does what on the platform.

Okay so there’s two reason why you might consider using a simulator initially.

Pro #3 – You Can Test New Strategies (Kind Of)

This one’s a stretch. You can sorta-kinda use a simulator to backtest new strategies.

The issue with this though is that testing a new strategy this way isn’t going to give you 100% accurate results. The simulator won’t account for liquidity, emotions, and a bunch of other things.

Things we’ll get into next.


Con #1 – You Won’t Be Risking Real Money

This was “Pro #1”, but it’s also Con #1.

You see a simulator is very 2-dimensional. It only simulates price movement.

It doesn’t simulate the actual emotions of fear and greed that take place in the live markets.

Moreover, you won’t have much emotional involvement on your part. Trading with no leverage feels the same as trading with 100x leverage on a simulator, because it’s funny money.

Con #2 – You Can’t Simulate Liquidity

This is probably the biggest issue with trading simulators.

With most simulators, price has to move through your order for you to get filled.

This is not so in the live market.

In the live market, your order is a real thing that gets placed in the queue. It waits there in line until it gets filled, or you cancel your order.

In the photo above is a picture of the /ES Level II after hours.

The 141 x 185 shows the orders on the Bid and Ask. These are real orders waiting to get filled.

In the actual market, if you were first in line on the Bid (out of 141) in this example, and the market traded at your price for a second, you would most likely get filled.

With a trading simulator, the market would have to move through your price for you to be filled.

This may not seem like a big deal with fake money, when you’re live with real money it’s a big deal.

Con #3 – You Emotions Won’t Be The Same

I alluded to this earlier. With a trading simulator, you have no emotional involvement. There’s very little will to better your skills, or to care about your habits and mistakes when there’s nothing really at risk.

I can’t stress this point enough.

Once you get the mechanics of trading down, most of it becomes a mental game.

You can’t practice your mental game on a simulator as efficiently as you can in the real market when it means something.

I’m not saying you should personally do it one way or the other, but merely giving you my perspective.

Con #4 – “Funny-Money” Doesn’t Mean Much

This one pretty much puts a button on everything I’ve been saying.

“Funny-money”, “Monopoly Money” who cares! It’s not real anyway…

With a trading simulator, you could be doing some unseen damage by forming some bad habits early on. Habits that are difficult to overcome.

Sometimes it’s better to be frozen in fear when making your first few live trades, than it is to overtrade with 100-lots.


There’s clearly some valuable use to using a trading simulator, but I don’t think the benefits outweigh the draws. One of the biggest things being the fact that you’re trading funny-money.

Your emotional involvement isn’t the same when you’re slinging around fake money as compared to when the stakes are real.

It can be risky in and of itself to use a simulator, because you might be instilling bad habits.

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Bad habits that are the results of not caring what you’re doing.

If I were in the position where I was choosing between using a trading simulator and going live, I would consider going live with very small positions. I wouldn’t use any leverage whatsoever.

Anyhow, just my opinion. I hope this helps anyone who’s asking whether or not they should use a trading simulator.

If you would like to continue the conversation, feel free to drop us a comment below.

Have a great day!