{"id":460909,"date":"2022-08-11T12:42:42","date_gmt":"2022-08-11T11:42:42","guid":{"rendered":"https:\/\/www.finder.com\/uk\/?p=460909"},"modified":"2026-02-03T04:40:06","modified_gmt":"2026-02-03T04:40:06","slug":"demo-account-for-trading","status":"publish","type":"post","link":"https:\/\/www.finder.com\/uk\/share-trading\/share-trading-guides\/beginners\/demo-account-for-trading","title":{"rendered":"What is a demo account for trading?"},"content":{"rendered":"

Getting started as a trader can be exciting, but also daunting. Trading is a different proposition than investing for long-term growth. With long-term investing<\/a>, you put your money into assets and \u2013 typically \u2013 leave it there for years (until you need it for retirement, for example). It\u2019s good practice to check in on investment performance now and then and to make any tweaks that are needed. But generally, long-term investors can take a fairly relaxed approach to investment management.<\/p>

Trading, on the other hand, involves short-term strategies to maximise returns on a quarterly, monthly or even daily basis. The idea is to make an immediate return from market fluctuations<\/a>, for example by buying assets when the price is low and selling them at a higher price shortly after. It requires dedication and vigilance. While those that get it right can turn a profit, it can be a high-risk approach and isn\u2019t for the fainthearted or those with no investment experience at all.<\/p>

If you\u2019re considering becoming a trader but lack experience, a demo account for trading can help.<\/p>

What is a demo trading account?<\/h3>

Demo accounts are offered by a number of online investment platforms<\/a> to let investors learn how things work and to practice trading with virtual money. You might hear using a demo account referred to as \u201cpaper trading\u201d.<\/p>

Who should use a demo account?<\/h3>

Demo trading accounts allow those new to trading to get a feel for trading markets and technology. They can make mistakes in a safe environment, without putting their own money at risk. They can also be used by more experienced traders that want to try out new trading strategies<\/a> or start trading in different markets.<\/p>

How do I get access to a demo account?<\/h3>

A number of online trading platforms offer some form of demo account. So all you should need to do is pick a provider that offers one and sign up. With some providers, you\u2019ll need to create a regular account (most offer this for free) and then set up the demo account. Others will let you sign up directly to the demo account.<\/p>

Are demo accounts free?<\/h3>

Yes. Unlike \u201clive\u201d accounts, which you\u2019ll pay some level of fees and charges to use, demo accounts shouldn\u2019t cost you anything or risk a penny of your own money.<\/p>

Bear in mind that trading platforms don\u2019t offer demos out of the goodness of their hearts, though. They provide them as a learning tool because they want demo account users to ultimately transition to a live account that will make the platform money. If, having tried out trading on a demo, you think you\u2019re ready to trade for real, proceed with caution and start off small. And remember that you\u2019re under no obligation to make the shift to a live account quickly or at all. If having tried it out on a demo, you decide trading \u2013 or trading in a certain market \u2013 isn\u2019t for you, then walk away.<\/p>

Check for any time limits on how long you can use a demo account, too. Some don\u2019t have automatic limits, though they may expire if you don\u2019t use them for a while. Others may expire automatically after 30-90 days.<\/p>

How does a demo account work?<\/h3>

The details of how demo accounts work will vary between trading platforms. As a general rule, you\u2019ll go through the following steps.<\/p>

  1. Sign up for the demo account. You\u2019ll usually need to supply some basic personal details, such as your name and email address. You may also be asked about your trading experience and which assets you want to trade in.<\/li>
  2. Download any software required for the demo account. Not every provider will require this, as many will instead use web-based platforms or mobile apps.<\/li>
  3. Learn your way around the trading platform. Double-check how much virtual money you have to trade with. Depending on the provider, this can range from \u00a310,000 to \u00a31 million. Assess the tools on offer to help you trade and the different types of assets available to trade in.<\/li>
  4. Start trading. Try and make your trades as close to what you would do in real life. So if, in real life, you\u2019d only spend up to \u00a3100 per trade, there\u2019s probably not much point in blowing \u00a310,000 on a single practice trade. Some demo accounts let you practice trading based on past markets, so you can see how different strategies would have worked in reality. Others allow for \u201cdo-over\u201d trades. If the demo account allows it, monitor your trading history and returns so you can see what approaches consistently work well and which ones don\u2019t.<\/li><\/ol>

    You might have noticed we\u2019ve mentioned strategies a couple of times now. Even with a demo account, it\u2019s worth going in with a strategy to try out. Even if you get lucky with trial and error in the short term, it\u2019s unlikely to work in the long term. Short selling<\/a> is one example of a trading strategy, but there are others. The trading platform you use is likely to have advice guides on the different trading strategies.<\/p>

    What providers offer demo trading accounts?<\/h3>

    Not every trading platform offers a demo account, but a number do. If you\u2019d appreciate the chance to practice before you start trading, it\u2019s worth looking out for a platform that has one. This might apply particularly if you\u2019re new to trading, if you want to try out new strategies or if you simply want to familiarise yourself with how a platform works. Trading platforms that have demo accounts include Capital.com, eToro<\/a>, IG<\/a> and Trading 212<\/a>.<\/p>

    Share dealing platform comparison<\/h4>
    Table: sorted by promoted deals first<\/div>
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