Page Summary
Virtual trading is a top forex trading strategy in 2023. Trustworthy brokerage firms offer access to demo trading. It is an excellent learning tool for traders at all levels. Virtual trading allows you to try different forex strategies with live market conditions. This article discusses how to find the best forex demo accounts in 2023.
How To Find The Best Forex Demo Accounts
The term “Demo Account” refers to a special kind of practice account. Anyone can use these trading accounts to become familiar with an online trading platform and its features in a low-risk environment.
Most people would simply do “paper trading,” which refers to keeping track of a series of hypothetical trades on paper. Today, “paper trading” generally refers to trading in a kind of digital “practice environment” where you don’t risk real money.
Most forex brokers offer some kind of free demo account. For the most part, brokers offer these demo accounts intending to provide traders the ability to test if the platform will fulfil their needs. If you are not sure which platform to go with when you are just starting out than you should check out our list of the best trading platforms.
Forex Demo Account Advantages
If you’re looking for a new broker, signing up for a demo account might be the quickest and most risk-free method for testing if that trading platform has all the features you need. It’s generally recommended to do this before putting any real money into an account with that broker.
Demo accounts can also be used to evaluate trading strategies and test trading robots. By using a demo account, traders are able to see how particular trading strategies would perform based on real-world data without needing to risk real money during the learning process.
Trading platforms provide charting features, indicators, and functions that are invaluable in the trading process. Signing up for a forex demo account can provide you with the valuable experience needed to confidently and quickly use a new trading platform. The more adept you are with the trading platform, the more likely you will trade profitably.
Forex Demo Account Disadvantages
Probably the most significant disadvantage with a forex demo account is that it’s not real money. This removes risk, but it also removes any potential gains. Connected with this, you don’t experience the intense emotional swings of real-life trading. This means demo accounts don’t help you develop a resistance to emotional trading. Emotional trading is trading based on what you “feel” is the right trade. Emotional trading – instead of trading based on a strategy – is one of the leading causes of failure on the market.
Inexperienced traders also tend to be complacent when using a demo account to practice their trading skills. Subconsciously, they know that there is no real risk involved, and so they may take more significant risks then they would do in a real-money environment. This lack of emotional experience with emotional control can cause the research and learning acquired from the demo account to be less than accurate, and therefore, less than reliable in the real world.
Lastly, some demo accounts are completely removed from real market trading data. That means essential real-world factors – such as lag time, slippage, and latency – might be invisible inside of the demo account.
Alternatives To A Demo Account
If a demo account doesn’t seem to fit your needs, you might consider a micro account. Micro accounts are funded with real money and can be used to simulate actual trading. For example, if you were to make it $2000 trade inside of a demo account and that $2000 trade were to increase significantly, you wouldn’t make any money. However, had you been trading inside of a micro account, you might have received some of the profit.
Another benefit of micro accounts is that they provide you with real-market conditions such as surprise news, slippage, and latency. Each of these things can dramatically affect the success (or failure) of a trade.
Trading Psychology And Demo Accounts
There’s a surprising amount of psychology involved in forex trading. It can be mentally and emotionally challenging, requiring that forex traders have complete control over their emotions along with a fact-based strategy for their trading behavior. If you take the demo account seriously, it can be an incredibly useful way for you to improve your mental and emotional fortitude for trading.
Account Size Management And Demo Accounts
No matter what form of trading or investing you are involved in, risk management it’s fundamental to your success. There are many different ways to manage risk and one of them that is related to demo accounts is account size management. Account size management is where you attempt to avoid significant losses in your account by choosing the size of your trades in proportion to the size of your account.
For example, if the trader has $100,000 in his trading account and decides to use 20% trade sizes ($20,000 per trade). If the first trade is lost, the account will lose 20% of its value. If two more losses of 20% happen, the account will be drawn down a total of $60,000. That trader must make a gain of 150% just to break even.
Compare that to a trader who decides to use 4% trade sizes. If this new trader also loses three sequential trades (the same as the first trader), he would’ve only lost $12,000 and could reach breakeven with a 17.6% gain.
Especially in times of significant market volatility and adversity, risk management is the key to staying solvent. Account size management within a demo account is a great way to develop your account size management skills.
Which Are The Best Forex Demo Accounts?
The best forex demo accounts are available at eToro, Capital.com, Libertex, AvaTrade, Forex.com, Plus500, and FXCM. eToro has a valuable demo account for traders at all levels. Capital.com offers the best demo account for beginners. Forex.com offers a professional demo account. We share below the top demo accounts we recommend.
Virtual Trading With eToro
Min Deposit: $200
Fees: 4.8
Assets available: 4.8
Total Fees:
77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. eToro AUS Capital Limited AFSL 491139. eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. OTC Derivatives are speculative and leveraged. Not suitable for all investors. See PDS and TMD. Cryptoassets are highly volatile and unregulated in the UK. No consumer protection. Tax on profits may apply.
eToro is a top brokerage firm with advanced forex trading platforms. It is an excellent choice for traders who want access to secure social trading tools. This forex broker has a valuable portfolio with access to popular forex currency pairs.
eToro has an impressive virtual account. Demo trading is helpful for both beginner and experienced traders. It lets you test forex trading strategies with live market data. eToro’s demo account is useful for improving your forex trading strategy.
This online broker has a competitive fee structure. It doesn’t charge hidden commissions. eToro is a secure broker with premium trading tools. It identifies well-performing traders and allows other traders to copy their positions. This online broker has many payment methods and an excellent support team.
Pros
- Features many popular forex currency pairs;
- Regulated by the FCA;
- Mobile forex trading app available;
- Demo trading account;
- Retail investor accounts
Cons
- High spreads;
- Limited assets
77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. eToro AUS Capital Limited AFSL 491139. eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. OTC Derivatives are speculative and leveraged. Not suitable for all investors. See PDS and TMD. Cryptoassets are highly volatile and unregulated in the UK. No consumer protection. Tax on profits may apply.
Virtual Trading With Capital.com
Min Deposit: $20
Fees: 4.8
Assets available: 4.7
Total Fees:
Capital.com is a top forex trading broker with a virtual trading account. It offers many services, including CFD and forex trading. This brokerage firm follows strict rules and has top-tier licenses. All its platforms use industry-leading safety protocols.
The demo account at Capital.com is intuitive. It is an excellent choice for beginner forex traders. The Capital.com demo account has many educational materials. It is an attractive forex trading strategy if you want to learn more about market volatility.
Pros
- Competitive fee structure with cost-free forex platforms;
- Access to many tradable forex instruments;
- Top-tier licenses from ASIC
Cons
- Expensive overnight fees;
- Lack of ownership for stocks;
- Limited payment methods with no access to PayPal;
- Limited markets and securities
79.17% of retail CFD accounts lose money
Virtual Trading With Libertex
Libertex is a secure forex broker with virtual trading tools. It has excellent forex trading tools and offers intuitive platforms. Libertex is a popular forex and CFD broker. It has top-tier licenses and uses industry-leading safety protocols.
This broker has a proprietary forex trading platform. It has a transparent fee policy with competitive costs. Libertex has a valuable demo account to help new traders learn more about forex trading strategies. It offers leverage trading tools and forex market data.
Pros
- Access to tight spread CFD trading;
- Competitive leverage trading fees;
- Versatile learning tools;
- Excellent track record and reputation;
- Access to many markets
Cons
- Suitable for professional CFD traders;
- No access to premium research tools;
- Limited customer support
Virtual Trading With AvaTrade
Min Deposit: $100
Fees: 4.9
Assets available: 4.9
Total Fees: 0.9 pip
AvaTrade is a beginner-friendly broker with forex trading platforms and a demo account. It offers a secure platform with average trading fees. AvaTrade offers CFDs and access to leading forex trading pairs. This broker has attractive learning tools and forex tutorials.
AvaTrade has a comprehensive research and learning center. It offers reliable market data and useful forex trading tools. We recommend this broker for traders at all levels. It provides useful forex trading solutions.
Pros
- Excellent forex trading platform with automated trading tools;
- Access to MT4/MT5;
- Low deposit requirement;
- Zero commissions and tight spreads
Cons
- Expensive inactivity fees;
- Lack of traditional investments
71% of retail CFD accounts lose money
Virtual Trading With Forex.com
Min Deposit: $100
Fees: 3.7
Assets available: 4.1
Total Fees:
Forex.com is an online broker with an excellent reputation and virtual trading tools. It is a leading platform with high-tech tools and professional forex materials. Forex.com offers different assets, including CFD and forex pairs.
Forex.com has excellent forex learning tools. It offers tutorials and instructional videos. Forex.com provides access to an industry-leading virtual account. It is a comprehensive solution for testing different forex strategies. Forex.com is a top choice for both new and advanced traders.
Pros
- Access to a comprehensive selection of forex pairs;
- Impressive forex analysis tools;
- Excellent reputation;
- Dedicated learning center
Cons
- Not suitable for equity trades;
- High requirement for professional client status eligibility
80% of retail CFD accounts lose money
Virtual Trading With Plus500
Min Deposit: $100
Fees: 3.5
Assets available: 2.9
Total Fees:
Plus500 is a popular CFD broker with access to a virtual trading account. It has top-tier licenses and is present on the London Stock Exchange. Plus500 is a trustworthy brokerage firm with excellent forex services.
This broker has a versatile portfolio with forex pairs, indices, and ETFs. Plus500 has a demo account with access to different market conditions. It is available on the web or mobile platform. Plus500 has expensive trading fees. We recommend it for active and professional traders.
Pros
- Tight spreads;
- Comprehensive portfolio with CFDs, forex, and commodities;
- Proprietary trading platform;
- Valuable forex trading features, including risk management
Cons
- Lack of social trading tools
77% of retail CFD accounts lose money
How To Start Virtual Trading?
Virtual trading is available with online brokers. We recommend the eToro demo account. eToro is a trustworthy brokerage firm with attractive forex and social trading tools. It has an excellent multi-asset trading platform. eToro is a good choice for both inexperienced and professional traders. Here is a step-by-step guide on virtual trading with eToro.
Step 1: Register A Trading Account
The first step is to register a trading account. eToro offers a simple sign-up form on its website. You have to upload personal information, including your full name and source of funds.
Step 2: Change To Virtual Trading Mode
After you open your account, eToro will request a deposit. You should skip this step and switch to the demo mode. You will receive access to $100,000 in paper funds.
Step 3: Choose A Forex Market
The next step is to choose a forex market. Search for the forex pair you want to trade, and start testing your strategy.
Step 4: Place A Demo Forex Trade
Choose from a buy or sell order and place your demo forex trade. Submit your stake and click on the “Open Trade” button. When you close the position, you will see the profit or loss on the trade.
Summary
There are many virtual trading accounts available in 2023. It is best to use the services of a trustworthy forex broker. Demo trading is an excellent learning tool for traders at all levels. It helps traders profitably transition to a live account.
Disclaimer
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
Past performance is not an indication of future results. Trading history presented is less than 5 complete years and may not suffice as basis for investment decision.
Copy trading is a portfolio management service, provided by eToro (Europe) Ltd., which is authorised and regulated by the Cyprus Securities and Exchange Commission.
Cryptoasset investing is unregulated in some EU countries and the UK. No consumer protection. Your capital is at risk.
eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.
Braden Chase is an investor, trading specialist, and former research specialist for Forex.com who helps aspiring investors develop the confidence and habits they need to make an income from the market. Braden has served as a registered commodity futures representative for domestic and internationally-regulated brokerages and has also spoken & moderated numerous forex and finance industry panels across the globe.