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Demo Trading Account

11 minutes
Demo Trading Account
Cristian Cochintu
Cristian Cochintu
26 March 2024

You should trade forex and CFDs on demo until you develop a solid system before you even think about putting real money on the line. 

A demo trading account is a great way to start operating in the world’s largest financial markets. You only need a practice account with the online broker of your choice to get your feet wet. That involves selecting among the various forex and CFD brokers available, which requires some initial research on your part to determine the most suitable brokerage for your experience level and trading requirements. 

You can open a demo account for FREE with and practice risk-free trading from any browser and operating system or using our award-winning apps for iOS and Android devices.  


But why is a demo trading account free? 

It’s because the broker wants you to learn the ins and outs of their trading platform, and have a good time trading without risk, so you’ll fall in love with them and deposit real money. 

A demo trading account allows you to learn how to trade stocks, currencies, indices, commodities, and even cryptocurrencies and test your trading skills and processes with ZERO risk. 

Yes, that’s right, ZERO. We repeat... 

You should trade forex and CFDs on demo until you develop a solid system before you even think about putting real money on the line. 

This article will provide you with all of the benefits of using a demo trading account. You'll learn what demo trading is, why you should consider a practice account, how to set up a demo trading account, the best way to use demo trading, and more! 

What is a Demo Trading Account? 

A demo trading account enables a trader to simulate a live trading environment - without putting any real money at risk. It enables a trader to start relatively quickly so that they can practice before risking real money. 

All traders should use a demo trading account to get a feel of what trading the financial markets is like, as well as to get used to the broker, and the trading platforms they are using. Essentially, it enables traders to practice their trading skills along with quite a few more enticing benefits.

Why Demo Trading? 

Did you know that global trading volumes in the foreign exchange market reached a record high in 2018? Thanks to volatility in global economics, more and more people are actively trading forex. However, trading a market that turns over more than $5 trillion every single day can be quite daunting at first. This is why a forex demo is recommended when you get started with forex trading and leveraged trading in general. 

Within minutes, the demo trading account can effectively become your risk-free practice account and can work as a free stock trading simulator also. With you gain access to over 2,100 CFDs on forex, shares, indices, bonds, commodities, ETFs, and cryptocurrencies. 

This could prove to be invaluable when you are first learning forex trading, stock trading, futures trading, gold trading, cryptocurrency trading, and any other type of CFD trading. You can easily set up a free demo trading account in a matter of minutes, and trade the global markets risk-free.   

Opening Up a Free Demo Trading Account 

Just about any brokerage will allow prospective and current clients to open up a demo trading account with them free of charge to allow traders to practice using virtual money. 

Demo account traders often also get access to at least some of the broker’s client services and customer support staff so that they can get a better sense of what dealing with the broker will be like when they decide to fund a trade account with real money. 

Traders wishing to open up a demo trading account can typically navigate to the website of one or more brokers and follow the instructions displayed there for opening up a demo trade or practice account with the brokers they select. 

Choosing a demo account for your needs might involve reviewing those offered by several online brokers with differing features in order to make an informed determination of which broker is the most suitable host for your particular trading strategies and preferences. 

When opening a demo trading account, you will receive a fixed amount to trade with or you can customize your initial amount, and sometimes the account might expire after 30 days or more, depending on the brokerage you select. 

Pros of Demo Trading 

Both novice and experienced traders routinely use demo trade to practice trading and try out a new broker or strategy. Some of the more common advantages of engaging in demo trading stocks, forex, and futures include the following: 

  • See if You Like Trading – Those new to trading can use a demo trading account to see if they are mentally and emotionally suited to the rigors of active online trading. Everyone is different, and some folks might really enjoy trading currencies, stocks, or other assets, while the activity may not suit others’ tastes, personalities, or lifestyles at all. 
  • Trade at No Risk While Training – Novices who are still learning to trade currencies, stocks, and other assets often feel considerably more confident putting their real money at risk in the market if they have a chance to try things out first. A demo trading account lets them put their training into practice in a close-to real-life environment without putting their real money at risk. This allows them to make common beginner’s errors while they learn without having to pay for the consequences out of their own pocket. 
  • Practice Good Money Management Techniques – One of the secrets to enjoying long-term success involves learning to implement well-established money and risk management principles. A demo trading account allows new or experienced traders to practice such techniques thoroughly on real exchange rate movements and see for themselves how the profits and losses impact their accounts. 
  • Learn to Manage Your Emotions When Trading – One of the most challenging aspects of trading for many people involves learning how to manage their emotional responses to winning and losing trades. Coping appropriately with otherwise normal psychological responses to making and losing money — such as fear, greed, and hope — can often distinguish the successful trader from the loser. 
  • Test a New Trading Strategy Without Risking Real Funds – Wise experienced traders and novices alike will generally want to test the success rate of any day trading, swing trading, or any other strategy they come up with before implementing it in a live trading environment. This allows them to accustom themselves to following the system and to work out any bugs in it that might become apparent while using it as real exchange rate movements occur. 
  • Try Out a New Broker’s Trading Platform – Unless you are using a global trading platform that a lot of online brokers support, you will probably want to use a demo trading account to see whether a new broker’s proprietary web or client-based trading platform is suitable for your trading needs.  
  • Check if a New Broker Has Helpful Features and Services – CFD brokers eager to have you open a live trading account with them will often give demo traders access to their special client features, educational and news services, and customer support departments. This can be a great way to check out the quality of the broker’s overall services before committing any real trading funds to make sure that they are the sort of trading partner you will want holding your trading account

Cons of Demo Trading 

Although demo trading can offer both new and experienced traders considerable advantages, some traders find the experience lacking in several significant ways. Some of the more common disadvantages of a demo trading account include the following: 

  • A Demo Trading Account Often Has Limited Funds and Duration – Online forex brokers will limit the funding of a forex demo account to the amount it was initially set up with. Also, demo accounts often have a fixed time duration after which they expire. This could mean that your demo trading track record might be lost or terminated at a time that may not be convenient for you. 
  • Real Trading Conditions May Differ – Although demo trading seems very realistic and uses real exchange rate data as it unfolds, the reality of trading can be quite different, especially during the fast markets surrounding major economic indicator releases or during major event announcements. 
  • Order Slippage May Not Occur as Often – In order to make their demo trading experience as attractive as possible to potential clients, online brokers might largely or even entirely eliminate the slippage from their system. Thus, if a stop loss is triggered in a demo trading account, it might be filled at the same price it was entered at, while if a stop loss was triggered in a real account at the same time and level, it might have actually been filled at a considerably worse rate depending on actual market conditions. 
  • Re-quotes May Be Less Frequent Than in Live Trading – As with order slippage, some online brokers looking to attract new clients via their demo trading programs might reduce or even eliminate re-quotes from their demo systems. In practice, re-quotes are a common — but generally undesirable — a reality for traders operating in live accounts since the market often moves while orders are being entered, so the system needs to re-quote a new exchange rate before the trade can be confirmed as executed. Usually, re-quotes happen when you trade forex with a fixed spread
  • Order Execution Times May be Faster – Since demo trading does not actually result in real transactions being entered into the market that can have profit or loss implications for the market maker or broker, the actual execution rate does not matter like it would with a real transaction. This can result in faster market order execution times observed when trading in demo accounts, while execution times seen for real account trading can depend on market conditions and may involve re-quotes or slippage in fast markets. 
  • Demo Spreads May be Tighter Even in Fast Markets – Due to the fact that a demo trading account does not involve real money for the trader or market maker, online brokers looking to impress potential clients might quote artificially tight spreads to demo account traders. In reality, the actual dealing spread quoted might be considerably wider, especially in fast markets when the exchange rate can move and fluctuate rapidly. 
  • You Might Learn to Overtrade – Some people find the experience of trading to be quite enjoyable and the thrill of entering a deal and taking risks can cause them to trade excessively. Sometimes the right thing to do as a trader is to just sit on your hands, rather than getting into the habit of continually pulling the trading trigger. Using a demo trading account involves no actual risk of financial loss, other than possibly the opportunity cost of not having taken the trades in a live account, so some people get into the bad habit of indulging their love of trading to an excessive degree. This can ultimately cause them to become unsuccessful traders when they move to a live account. 
  • Excessive Use of Leverage Can Cause Live Trading Disasters – Some traders seem to enjoy using the high degree of leverage offered in demo accounts by some online brokers to take very large positions relative to their virtual account size. While this can make them large virtual profits if their view turns out to be correct, it can also wipe out their account if the market goes against them. Using such high leverage compulsively can also be a recipe for failure if this behavior pattern gets repeated when trading in a live account. 
  • Poor Trading Habits Do Not Have Real Consequences – Although practice can be a useful way to learn to avoid trading mistakes, some people do not seem to learn their lessons quite as well if the real loss of money was not involved. This can result in the establishment of undesirable trading habits that will need to be overcome for a trader to enjoy long-term success when operating in a live account. 
  • Your Emotional Responses Might Be Different – Trading successfully generally involves learning to manage your emotional responses appropriately. Sometimes this key lesson can only be learned by actually making or losing real money since people may psychologically shrug off the virtual profits and losses accruing in their demo trading account. 
  • Use Similar Account Sizes and Risk or Performance Can Vary – When trading in a demo account, it makes sense to use roughly the same investment capital amount and risk-taking parameters you intend to use when trading real money. If you do otherwise, then your performance expectations may not be met once you start trading a similar strategy with a live account. Demo Trading Account: Opening and Key Facts  

How to open a demo trading account? 

In this section, we are going to explain how to open a demo trading account with a step-by-step guide. 

Step 1: Fill out the registration form 

You’ll be asked to fill in the registration form to open a demo trading account. Limited information will be required. Here’s what you’ll be asked to enter: Username and password, First name and last name, Country of residence, Main contact number, and Valid email address. 

Step 2: Verify your profile 

Once you submit the demo account registration form, you will get an email with your account details. You might have to verify your email address before logging in to the account. You might also get a call from customer support to guide you through this process. 

Step 3: Login into the demo account 

Use the login details provided to start using your demo account.’s demo trading account doesn’t have a time limit so you can take your time to trade and learn. 

How to switch to a live account? 

When switching to a live account, your demo trading account won’t expire. To open a live account you will need to upload proof of your identity (Passport, ID, or Driver’s License) and proof of your residence (utility bill or bank statement). Depending on the country, can ask you to fill out a questionnaire about your trading knowledge. As soon as completes the verification of the account, you can fund it. The minimum deposit depends on your location. 

How to best use your demo trading account? 

Here are a few tips on getting the most from your demo trading account. 

  • Set up your demo account as you would set up a real account with the platform, currency, balance, and account type 
  • Do not open large positions if you are not planning to trade with large amounts of money 
  • Treat money as if it were real, so you won’t get involved in avoidable bigger risks 
  • Practice daily 
  • Study and integrate knowledge by using the educational tools provided by CAPEX Academy






Cristian Cochintu
Cristian Cochintu

Cristian Cochintu writes about trading and investing for Cristian has more than 15 years of brokerage, freelance, and in-house experience writing for financial institutions and coaching financial writers.