What Are Demo Trading Accounts?
A demo trading account is a financial tool that allows traders to familiarise themselves with and test out trading strategies without incurring any financial repercussions. The account operates like a “live,” real trading account, but it is funded entirely with “fake” money. Traders can trade without risk, as there is no real capital at stake. Some demo accounts, such as a day trading demo account, focus on certain assets and strategies while others are more generalised.
There are many different types of demo accounts, but, overall, these accounts should have the following characteristics:
- Free To Use. Demo trading accounts should be free to set up and use. The entire purpose of a demo account is to allow traders to interact with virtual money, with no deposit necessary. If a brokerage does not offer this practice account for free, it is best to seek out another platform.
- Wide Range Of Assets. Traders should be able to trade a wide range of assets on their trading demo account. Assets can include forex, commodities, indices, cryptocurrencies, stocks, and more. To get the most practical experience out of your demo account, you need as extensive a range of assets to trade as possible.
- Easy To Set Up. A demo account should be simple to set up, and it should also have an easy user interface. You will want to begin trading quickly, as many demo accounts have a time limit attached to their terms and conditions.
- Large Amount Of Virtual Capital With Which To Start. Some brokers permit you to use $10,000, if not more, in virtual capital to trade with a demo account. The more money with which you can trade, the more expansive your strategical practice can be.
- Full Functionality. There are MT4 demo accounts that have a full range of functionality, truly allowing traders to know what it is like to use the platform in a live context. The best demo trading accounts in the U.K. will offer you as much functionality as possible, giving you their full trading experience.
- Access Via Multiple Platforms. If possible, a broker should offer the demo account on a mobile, download, or web platform. Being able to use a demo account via mobile will allow you to trade on-the-go, as a mobile trading experience may differ from trading at home on a desktop or laptop computer.
What Is The Best Demo Trading Platform In The UK?
As online brokerages have evolved, many have developed cutting-edge demo accounts as a way to entice new traders to sign up. Three brokers with the best demo trading platforms in the U.K. are Pepperstone, eToro, and XTB. Overall, these brokers provide the highest-tier demo accounts, offering full functionality, user-friendliness, and an expanded capacity to their users.
Highlight: 30-Day Increasable Time Limit
Pepperstone is a trading platform that is based in Melbourne, Australia and compatible with the U.K.’s Financial Conduct Authority. This broker provides an excellent range of demo accounts that work with the MetaTrader 4, MetaTrader 5, and cTrader platforms. Additionally, these demo accounts grant traders £50,000 each in virtual funds. You have a thirty-day time limit to use Pepperstone demo accounts, and you can increase that time limit through a request to customer service.
You can access several trading tools while trading with these demo accounts, including technical indicators, graphic tools, and timeframes. Each of these tools are invaluable to the trading experience, as they add a layer of depth and knowledge to strategy development. Pepperstone users can also, while trading on the demo account, access more than sixty currency pairs with a 30-millisecond average execution speed.
Here are several other features to note about the Pepperstone demo account:
- Up to 30:1 Leverage
- Environment Is Similar To ECN Trading
- Award-Winning Customer Support
Overall, Pepperstone is a well-rounded broker, and its demo account contains all traders need to become more knowledgeable about the markets.
Highlight: £100,000 In Virtual Funds Available
eToro is a well-known global broker with millions of clients around the world. Founded in Israel nearly two decades ago, eToro operates in the U.K. under the Financial Conduct Authority’s regulation and guidance. For those traders who want to practise virtually, eToro provides a demo account with £100,000 in virtual funds.
Additionally, this demo account is fee-free and unlimited. It allows users to trade cryptocurrency, making it somewhat of a crypto demo account, a tool that is rarely found in the U.K. There is no expiration date on the account, so you can trade virtually until you feel comfortable switching to the live markets. Should you run out of virtual funds while trading on an eToro demo account, you can request more by talking to the broker’s customer service department.
Highlight: Excellent CFD Demo Account
XTB is an award-winning Polish broker that allows its traders to access a range of CFD markets. It also has an excellent demo account for trading virtual CFDs on stocks, ETFs, and other assets. XTB offers both the MetaTrader 4 and xStation platforms. The latter was developed in-house for XTB customers, and it has developed an impressive reputation in the software industry.
XTB allows you to trade £100,000 in virtual funds with its demo account, and the time limit is four weeks. When you trade with this virtual account, you have access to more than 2,100 CFD markets. Spreads start as low as 0.2 pips, and leverage is up to 30:1. Overall, XTB has an excellent CFD demo account for those who want to practise trading that specific instrument.
What Is The Best Forex Demo Trading Platform?
The forex (foreign exchange) market is worth trillions, and it is a global, decentralised way for users to trade currencies. Forex is a popular asset offered by brokers, and, though it can be complex, many brokerages offer online trading accounts to help clients learn to manoeuvre the exchange markets.
The brokerages in the U.K. that offer the best forex demo accounts are CMC Markets, Plus500, and Forex.com.
Highlight: Unlimited Time Frame
Founded in 1989, CMC Markets is a long-established forex and CFD broker. It is headquartered in the United Kingdom, and it operates under Financial Conduct Authority regulation. CMC offers its traders an excellent unlimited forex demo account, which means that you can trade with it for an unrestricted period of time.
You have access to £10,000 in virtual funds, and the lack of time limit ensures you can trade at your own pace. On this demo account, you can access major, minor, and exotic currency pairs. Additionally, CMC Markets has a demo account for its proprietary platform, Next Generation. Next Generation is somewhat complicated to use when compared to MT4, but, in fairness, beginning traders have all the time they need with which to practise using this high-tech platform. Additionally, you can access leverage of up to 30:1 with this account, and you have the ability to open a financial spread betting demo account, too, if you’re interested.
Highlight: Access To 70 Currency Pairs
Plus500 is listed on the London Stock Exchange and the FTSE 500 (an index tracking the U.K.’s largest public companies). Plus500 has less than two decades’ experience in the industry, but it is still one of trading’s most well-known, well-liked companies. The brokerage offers a substantial selection of more than 2,500 financial instruments, including seventy currency pairs.
Your Plus500 demo account is completely free, with no hidden fees or charges. All you need to provide to create this account is an email address and password; there are no payment details required. The virtual account has no time limit, and it is automatically loaded with £20,000 in virtual money. When you are ready to convert to a live Plus500 account, the process requires a simple verification, as well as a minimum deposit of $100. Because the demo account so closely matches the live one, your learning curve with the Plus500 live account should be minimal.
Highlight: Identical To The Live Trading Account
Forex.com has over twenty years’ experience in the financial industry, and its parent company is currently listed on the New York Stock Exchange. Forex.com offers a thirty-day demo account with access to £10,000 in virtual money. The demo account is free to use, and it has real features from the Forex.com live account. The two accounts very nearly match, which means that traders get a very effective introduction to trading the forex markets with this demo.
Another attractive feature of Forex.com is its range of different markets. You can access hundreds of instruments across the forex, indices, shares, cryptocurrency, and commodities sectors. Within the forex market, you can trade eighty currency pairs. Forex.com’s spreads range from 0.8% to 3.33% margin, and the broker offers educational resources for traders of all skill levels.
What Is The Best MT4 Demo Trading Platform?
MetaTrader 4 is a free-to-use forex trading platform. It is one of the most popular platforms in the industry, consisting of trader-centric tools such as charts, technical indicators, a wide range of analytical features, and a flexible trading system. Since MT4 was released in 2005, it has become an industry standard.
Many brokerages provide an MT4 demo account. Some even offer an MT5 demo account, though that account is less prevalent in the industry. MT4 demo accounts let traders adapt to the MetaTrader 4 platform. Though user-friendly, it is always advantageous to be able to practise with this high-tech software before trading with it live. Two brokers with the best MT4 demo accounts in the U.K. are AxiTrader and GoMarkets.
Highlight: Highly Efficient Demo Account
AxiTrader was founded in Sydney nearly two decades ago, and its U.K. office is named AxiCorp Ltd. AxiCorp Ltd. is under the supervision of the Financial Conduct Authority, and its main goal is to provide an efficient platform to its traders, something that it achieves through the use of the MT4 platform.
You can sign up for an MT4 demo account with AxiTrader, accessing £50,000 in virtual funds. It takes only a couple of personal details to get started with this demo account. You can access super-fast execution speed, trading with this demo account for a full thirty days until it expires. When you make demo trades, you not only can use the real-time executions, you can also use the spreads.
Highlight: Leverage Of Up To 500:1
GO Markets is an internationally-recognized broker that has received accolades throughout the trading industry. Its MT4 demo account allows traders to practise trading over 350 instruments, including CFDs on indices, forex, metals, and commodities. You can access fast execution, real-time spreads, and leverage of up to 500:1. GO Markets provides traders with £50,000 in virtual funds.
When you trade on the GO Markets demo account, you can use more than eighty technical analysis tools and engage with 24/5 customer support. Those who want to trade on-the-go can download the GO Markets app for iOS or Android, and that app allows for access to the demo account. In the future, GO Markets expects to add an MT5 demo account.
Pros And Cons Of Demo Trading Accounts
Demo trading accounts have their pros and cons, but you will find that their advantages outweigh their disadvantages.
Pros of a demo account include:
- There is no risk, as a demo account is funded with virtual money.
- A demo account allows you to engage in self-analysis and build confidence in your trading skills.
- You can practise strategies without incurring financial losses.
- You can become more engaged and knowledgeable about a platform before using it live.
- A demo account could induce false confidence, as there is no appreciation of real risk.
- Demo accounts don’t take into account slippage or commissions.
If you are a new trader who needs to practise strategies and become more familiarised with the industry, starting a demo account may be in your best interests. These accounts have no risk attached, and they allow you to build confidence as a trader before incurring potential financial repercussions.