About this site
How Trades Work is an interactive guide to what happens between pressing Buy and owning a share, and what that means for anyone trying to beat the market or just invest sensibly.
Why it exists
Most people who own stocks have never seen the machine that sets their price. Trading apps show one number and a button. Underneath are queues of orders, firms that make a living standing in the middle, brokers deciding where your order goes, and a clearing system that makes sure the shares and cash actually change hands. This site tries to show all of it, in order, with something to touch in every chapter.
How the simulated market works
The live markets on this site run in your browser. Nothing is fetched from a real exchange, and the company being traded is invented. The rules are real ones:
- A limit order book with price-time priority. Buy and sell orders rest at their prices; an incoming order trades against the best opposite price first, and at the same price the oldest order goes first. Trades print at the resting order's price. Most stock exchanges work this way.
- A hidden true value. Behind the price there is a fundamental value that drifts, with occasional jumps for news. No one sees it exactly.
- Market makers quote both sides around their own estimate of value, widen their quotes when the market gets jumpy, lean against their inventory, and adjust their estimate when someone trades with them, because order flow carries information.
- Informed traders see value more accurately and trade when the price is far enough off to cover the spread. Noise traders buy and sell for reasons unrelated to value. Momentum traders chase recent moves.
Tuned this way, the simulated stock moves about 1.2% per simulated trading day, stays close to its hidden value, makes market makers a thin profit and noise traders a steady loss. Every simulation is seeded, so the same seed produces the same market.
What it leaves out
Real markets have many venues competing for the same stock, hidden and midpoint orders, auctions at the open and close, fees and rebates that differ by venue, latency measured in microseconds, thousands of participants with strategies far more varied than four types, and news that does not arrive as a tidy number. The simulation is a teaching model. It is good at showing why spreads exist, how prices absorb information and why trading costs matter. It is not a forecast of anything, and a strategy that works here proves nothing about real stocks.
Questions
Is this investment advice?
No. It explains how markets work and summarises widely accepted evidence about costs and diversification. Decisions about your own money depend on your situation.
Can I lose real money here?
No. There are no accounts, no real orders and no payments. The profit and loss you see is simulated and resets when you reload.
Does the site track me?
There are no accounts and no cookies. Cloudflare's privacy-focused analytics counts page views without identifying visitors.
Who made it?
Will Loughlin built it as day 26 of 30 websites in 30 days, a challenge to ship a new site every day. More at willloughlin.com.