Broker to Trading

When first trading, the beginner may or may not try out the demo trading platform. They may try it out for a little while then jump into trading. However the demo trading account is a way to become familiar with the online trading platform before trading on a live account. This is important because the trader can make mistakes simply because they do not feel comfortable using the platform.

So rather than looking at a demo account as a first step before jumping into live trading, the trader can test out the platform and trading. This applies to any trader who is using the platform for the first time. However as the trader becomes more familiar with the platform, then the need for a demo account becomes more one of using it to trade without risk, for example to test out ideas.

A demo account contains virtual funds which cannot be withdrawn but are given by the broker. Thus the trader can trade markets without risking real money. This is important because markets are complex and trading is hard. What this really means is that it is difficult if not impossible to correctly gauge a direction for a trade. Rather the trader needs to trade with assumption that the market will move against the traded position. Thus the trader needs to be familiar with the behaviour of markets, with analytical tools as applied to them and how to enter, manage and exit a trade.

The trader may typically follow rules, which means that they trade based on indicator rules for example, but the trader still needs to be familiar with how this actually happens in the market. The trader may wish to read a book about technical indicators before entering the market and thus combine theory and practice.

The trader may also wish to take breaks from live trading and practice on the demo. The brokers in the table above are chosen because they offer user friendly platforms, allow the trader to switch between live and demo at any time and let the trader explore the functionality of the real account on the demo account.

Best Demo Trading Platform

The pick of best demo trading platform is eToro. This is because it is firstly a user friendly platform, with a clear interface. Secondly because it allows the trader to switch between real and demo at any time (the demo does not expire). Thirdly because when signing up the trader can access the demo and test out the platform and its features. The demo account is called the Virtual Portfolio on the platform.

But of course eToro is known for its social and copy trading. These features is available on the demo account. The trader can follow other traders, reading the bio and their performance charts and make a decisions about whether to copy their trades. The trader can then follow the performance of the trader in their Portfolio. This mirroring of the demo and real accounts is one reason why this broker is picked. However there are differences, including that the money is virtual and that the trader may be trading with larger sums than in their real account.

The trader can construct a portfolio consisting of other traders and markets. These markets include real Stocks and ETFs (Exchange Traded Funds) when bought at eToro CySEC and FCA regulated, with no commission charge. The trader may also buy real Cryptocurrencies to own at eToro Cysec and FCA regulated.

The other markets and those three markets when sold are CFDs (as are all markets at ASIC regulated eToro). When trading a CFD, the trader does not own the underlying market. eToro has a relatively wide range of markets to trade, now including Soft Commodities with over 1000 overall. Thus the trader can demo trade these markets and place them in their Virtual Portfolio.

So the trader can trade on the demo account reflecting the functionality of the real account. Whenever they wish they can switch to the real account and construct a real Portfolio, to which can be added the markets being traded or traders being copied. The trader may not wish to copy traders but can still use the social News Feed as a way of accessing the views of other traders on the platform.