Demo Accounts

Author

Royston Wild

Royston is a UK-based writer and investor with over a decade of expertise in the financial markets, specialising in stocks, forex, and commodities. He contributes to several leading investment websites across the UK and holds a number of FTSE stocks in his portfolio.

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Editor

James Barra

James is a UK-based writer and investor with consultancy experience at some of Britain's largest financial organisations. James authors, edits and fact-checks content for a row of investing websites.

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Updated

May 7, 2024

Demo accounts are trading simulators that allow you to practice dealing in financial securities without putting your cash on the line. They’re an essential starting point for beginners but also a valuable tool for experienced investors looking to test strategies.

Explore our selection of the best demo trading accounts, tested by our British experts who have used dozens of trading simulators over the years and placed countless paper trades.

How Did We Choose The Best Demo Accounts?

To list the best brokers with demo trading accounts, we:

What Is A Demo Trading Account?

A demo account is a free, interactive market simulator that online brokers offer to introduce their trading services to potential customers.

These virtual accounts replicate real market conditions, allowing you to experience financial markets and to road-test platforms and apps before setting up a real-money trading account.

Practice accounts are bankrolled with virtual cash, the amount of which varies from broker to broker, though typically ranges from £10,000 to £100,000 in our experience.

Some demo accounts can be used indefinitely, though the majority expire after a fixed period, normally 30 days to 90 days.

IG Demo Account

These simulators allow you to acquire a better understanding of market dynamics – including price movements, volatility, and liquidity – than a book, presentation or investing blog can provide. By providing direct exposure to the cut and thrust of trading, they help novice traders, in particular, get up to speed.

Trading simulators are especially useful for investors who plan to use a high-risk, leverage-based trading strategy. Utilising borrowed funds can magnify losses as well as gains, so practising with fictional money at the outset can help traders avoid thumping setbacks.

Even though I’m not dealing with real money, it’s important I treat my demo account as if it is real. That way I can more effectively replicate the day-to-day requirements and psychological challenges of online trading.

Royston Wild

Author

Steps To Open A Demo Account

In recent years, we’ve seen companies invest heavily in areas like technology, education and promotional offers to entice traders. However, demo accounts remain one of the most popular tools they also use to draw in customers. Yet after using dozens of demo accounts, we’ve found not all trading simulators are the same.

Here are the 5 key steps you need to follow to open a demo trading account, alongside the key considerations:

1. Decide What To Trade

The first thing you’ll need to decide is what asset class or classes you wish to trade. This is because some brokers only allow certain securities to be traded, either in their demo or real-life accounts.

OKX, for example, specialises in cryptocurrency dealing. In contrast, other brokers offer a much broader range of asset classes. eToro, for instance, allows you to trade stocks, commodities, indices, exchange-traded funds (ETFs), plus traditional currencies and digital currencies.

2. Bankroll Size

Next, consider how much simulated cash the broker allows you to trade with. The bigger the pot, the longer you can potentially trade for before running out of funds. More cash also allows you to place larger trading positions, and thus better replicates real-life conditions.

The size of the virtual bankroll can differ greatly across brokers. City Index and FOREX.com both offer a £10,000 kitty. Plus500 offers £40,000; XTB provides £100,000; while IC Markets stands out by providing unlimited funds.

XTB Demo Account

Certain brokerages also allow you to increase or decrease the amount of virtual currency in your accounts upon request. At eToro, for instance, I’ve found you can double your initial credit of $100,000 by dropping a message to customer service.

The amount of virtual funds available may also vary depending on the type of financial product you plan to use. For example, IG gives you a virtual £20,000 to trade with: £10,000 in a spread betting demo account, and £10,000 in a CFD trading simulator.

3. Trading Timeframe

Think about how long you plan to trade with virtual funds – beginners in particular may need an extensive testing period.

After using countless demo trading accounts, we’ve found most brokers only allow demo accounts to remain open for a limited time. Once the period expires, access to the trading simulator may be lost, unless you open a live trading account with the brokerage.

Once again, the lifespan for demo accounts can differ greatly across the industry. For XTB this stands at 30 days, while AvaTrade it’s 6o days. easyMarkets, meanwhile, allows unlimited use of its trading simulators.

Importantly, demo accounts can also be suspended if they are not used for a certain period. For example, with IC Markets, virtual accounts expire following 20 days of inactivity, though it still has one of the best demo accounts I’ve seen, especially for active traders who seek greater flexibility. It offers zero restrictions on the life of the demo account, along with unlimited funds.

4. Trading Platform

Trading simulators also give you a chance to experience a broker’s services before opening a real-life account, including the quality of the platform – one of the key reasons we use demo trading accounts.

The MetaTrader 4 (MT4) and MetaTrader 5 (MT5) platforms are available with most demo accounts where brokers support these industry-leading third-party solutions.

OANDA traders, for example, can use the company’s own browser-based platform, or they can choose to download MT4 and trade that way.

Some brokers only allow demo users to trade with MT4 or MT5. This may not be desirable for those who don’t wish to download extra software or do not like the increasingly outdated platform, which is geared towards experienced traders.

MetaTrader Demo Account

Other limitations to be aware of include brokers imposing limits on the number of open positions that can be held in demo accounts. With FxPro, for instance, this is capped at 70 for MetaTrader accounts.

Brokers also increasingly make their demo accounts available for use on mobile devices. This can be a dealmaker for traders who like to do business on the move, with FinTech Global reporting that downloads of retail trading apps in the UK have more than doubled in recent years.

5. Time To Sign Up

Once you’ve decided which brokerage to go with, it usually takes only a few minutes to sign up, set up the platform, and start paper trading. The vast majority of companies we’ve opened demo trading accounts with require only basic information at this stage.

With CMC Markets, for example, I simply had to select the UK as my region, input my email address, and choose a password. I didn’t even have to disclose my name. After this, I punched a verification code the company emailed to me into the webpage, and the trading platform opened before me.

This process took less than five minutes from start to finish.

Royston Wild

Author

Other brokerages we’ve used may ask for more details though. FxPro requires your date of birth, nationality, employment status and trading knowledge.

RoboForex goes still further. It requires you to verify your address and provide identity documentation like a passport, ID card or residence permit. In this respect, the requirements of opening a demo account are the same as with a live account, which is fine if you plan to trade real money with the broker, but it’s time-consuming and frankly irritating if you just want to use the free simulator.

Pros and Cons Of Using Demo Accounts

Pros

Cons

Bottom Line

Demo accounts can be an invaluable tool for investors. As well as teaching new traders how to navigate financial markets in a risk-free way, they can help both novice and experienced investors understand whether a certain broker is right for them.

However, no two trading simulators are exactly the same, so find the one that best meets your needs from our list of top-rated demo trading accounts for 2024.

FAQ