Virtual Trading is a way that people new to investing can practice investing and gain experience with the stock market by investing virtual dollars instead of real dollars. Virtual trading is also called "paper trading," "stock simulation," and "stock market game."
With virtual trading, you are typically given a virtual $100,000 in cash in a virtual brokerage account. With this play money, you can then start pretending to buy and sell stocks ( and sometimes options and futures). These pretend trades are usually made at delayed stock prices, but it is close enough for people looking to learn more about the market.
Just like airline pilots practice in aircraft simulators before they every fly a real airplane, virtual trading allows people to practice trading in the real world with real stocks and real prices before they crash and burn their real money portfolio.
The most popular free stock market game sites are http://www.HowTheMarketWorks.com and http://www.WallStreetSurvivor.com. The HowTheMarketWorks sites is a very simple site which is popular among college and high school classes, and the WallStreetSurvivor.com site is better suited for the adult population. Both are free to register and you can also create your own contests and invite your friends.
A Motley Fool CAPS portfolio offers similar experience. Although not suited to short term trading, those who can beat the S&P 500 Index gain points and rise in ranking. Successful stock pickers are readily revealed.