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World 0 · Start Here · lesson 9 · level 1

Practice money before real money

Practice money lets you learn from mistakes that cost nothing real, so you build skills and habits before any real money is ever at stake.

In one line

Pilots practise in a simulator before they fly a real plane. Traders can practise too.

Explained simply

Practice money is pretend money, like the money in a board game, so you can try things and make mistakes without losing anything real. This app only ever uses practice money, and it never tells anyone what to do with real money. Practising first helps you learn the rules and build good habits before any real money is at stake.

The lesson

Simulated trading, also called paper trading, means making pretend trades with practice money at real market prices, so the wins and losses are not real. It works like a flight simulator: you can learn the controls, make mistakes and try again without anyone getting hurt. Real trading is different, because losses are real, there are costs such as fees, and feelings like fear and excitement get much stronger. That is why this app uses practice money only: real trading is for adults, and even then only after lots of practice and only with money they can afford to lose.

A worked example

Illustrative example: with a practice balance of 10,000, you buy 10 shares at 100, which uses 1,000 of practice money (10 times 100). The price falls to 95, so the practice trade shows a loss of 50 (10 times 5, the drop from 100 to 95), and the balance is now 9,950 (10,000 minus 50). No real money was lost, but the lesson is real: next time, you can decide the most you are willing to lose before you trade.

The same idea at four levels

1. Beginner. Practice money is pretend money for learning, so mistakes cost nothing real.
2. Foundation. This app uses practice money only and never gives advice about real money.
3. Intermediate. Practice works best when you treat pretend money as if it were real and follow the same rules every time.
4. Advanced. Real trading adds real losses, costs such as fees, and much stronger feelings, so practice results can look better than real ones.
5. Expert. Real trading is only for adults, and even then only after steady habits over many practice trades, using money they can afford to lose.

Mistakes to avoid

• Treating practice money carelessly, which builds habits that would be costly with real money.
• Thinking great practice results mean real trading would go the same way.
• Rushing towards real money before building steady habits over many practice trades.

Goal of this lesson: Explain the difference between practice money and real money, and why this app uses only simulated trading.