Stock market simulators, like Trading Blitz, provide an excellent environment for traders to practice strategies, refine technical analysis skills, and build confidence without risking real money. However, many traders fall into common pitfalls that limit their growth and effectiveness in simulated trading. In this guide, we’ll explore the most frequent mistakes traders make when using a stock market simulator and how to avoid them to maximize learning and success.

1. Treating the Simulator Like a Game Instead of a Learning Tool

The Mistake:

Many traders approach simulators like a game, making reckless trades with no real analysis simply because there’s no financial risk involved. This can create bad habits that carry over into live trading.

The Solution:

Treat every trade on Trading Blitz as if it were real money. Follow your trading plan, analyze setups carefully, and focus on developing discipline.

Trading Blitz Assignment:

• Before placing any trade, write down your reasoning for entry and exit points.
• Track your trades and review performance to see what works and what doesn’t.

2. Ignoring Risk Management

The Mistake:

Since there’s no real financial loss, traders often ignore stop-loss orders, risk too much per trade, or over-leverage their account.

The Solution:

Adopt risk management rules just as you would in live trading. A common rule is to risk no more than 1-2% of your account per trade.

Trading Blitz Assignment:

• Set a stop-loss on every trade and track how often it saves you from larger losses.
• Try to maintain an account balance above $75,000 to remain eligible for Challenge Mode, reinforcing careful risk management.

3. Overtrading and Chasing Every Move

The Mistake:

Traders often feel the need to be in constant action, leading to overtrading and forcing trades that don’t meet their strategy criteria.

The Solution:

Be selective with your trades. Focus on high-probability setups and avoid entering trades just for the sake of being active.

Trading Blitz Assignment:

• Use the simulator’s filtering tools to trade only setups that fit a specific strategy, such as MACD crossovers or RSI crossing 50.
• Limit yourself to a set number of high-quality trades per session.

4. Failing to Adapt to Different Market Conditions

The Mistake:

Some traders only succeed in one type of market (e.g., trending or range-bound) but struggle when conditions change.

The Solution:

Learn to recognize and adapt to different market conditions by testing a variety of strategies.

Trading Blitz Assignment:

• Analyze past trades and determine whether they performed better in trends or consolidations.
• Practice using Bollinger Bands to identify breakouts and range-bound markets.

5. Ignoring Emotional Discipline

The Mistake:

Even though no real money is at risk, traders still experience emotions like greed and fear, leading to impulsive decisions.

The Solution:

Develop emotional control by sticking to a predefined trading plan and practicing patience.

Trading Blitz Assignment:

• Keep a trading journal to document emotional responses and decision-making patterns.
• Play Challenge Mode to simulate the pressure of live trading and practice maintaining emotional discipline under timed conditions.

6. Not Reviewing and Learning from Mistakes

The Mistake:

Many traders fail to analyze their past trades, missing valuable learning opportunities.

The Solution:

Regularly review trade history, identify mistakes, and adjust strategies accordingly.

Trading Blitz Assignment:

• Use the trading history feature to identify recurring mistakes and develop an improvement plan.
• Compare results from different technical indicators to find the most effective strategies.

Conclusion

A stock market simulator like Trading Blitz is a powerful tool for developing trading skills, but only if used correctly. Avoid these common mistakes, approach simulated trading with discipline, and continuously refine your strategies to become a more proficient trader.

Start practicing today on Trading Blitz and elevate your trading game!

About Trading Blitz
Trading Blitz is a free trading simulator game which allows students to learn and practice technical analysis on historical stock charts. Players start with a virtual account balance of $100,000 and try to grow it as large as possible. When you're ready, you can battle it out against other players in 90-second matches trading the same anonymous charts. The simulator offers basic and advanced statistics, forums, and the ability to filter charts.