A Forex demo account is a capital-risk-free account but risks misplaced confidence for manual traders. Traders can test the trading environments of brokers or try different trading strategies. It is also necessary to evaluate automated trading systems.
Read on to view my selected shortlist of the best Forex demo account brokers below, and tips on how to pick the best demo account and get the most out of it.
- FXTM, Best all-around broker with high floating leverage and fast execution.
- FP Markets, ECN trading with leverage up to 1:500.
- Eightcap, Competitive pricing + excellent daily videos.
- BlackBull Markets, Best ECN trading environment, with scalping and hedging.
- AvaTrade, Highly regulated, choice of fixed or floating spreads.
Best Demo Accounts Comparison
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Regulators | CMA, CySEC, FCA, FSC Mauritius, FSCA | ASIC, CySEC, FSCA | ASIC, CySEC, FCA, SCB | FMA, FSA | ASIC, BVI, Central Bank of Ireland, FFAJ, FSCA, KNF, MiFID |
Year Established | 2011 | 2005 | 2009 | 2014 | 2006 |
Execution Type(s) | ECN/STP, Market Maker | ECN/STP | ECN/STP, Market Maker | ECN/STP, No Dealing Desk | Market Maker |
Minimum Deposit | |||||
Average Trading Cost EUR/USD | 0.1 pips | 1.1 pips | 1.0 pips | 1.3 pips | 0.9 pips |
Average Trading Cost GBP/USD | 0.2 pips | 1.4 pips | 1.2 pips | 2.0 pips | 1.5 pips |
Average Trading Cost Gold | $0.18 | $0.21 | $0.12 | $0.90 | $0.29 |
Trading Platform(s) | MetaTrader 4, MetaTrader 5, Proprietary platform | MetaTrader 4, MetaTrader 5, cTrader, Proprietary platform, Web-based | MetaTrader 4, MetaTrader 5, Trading View | MetaTrader 4, MetaTrader 5, Trading View | Other, MetaTrader 4, MetaTrader 5, Web-based+ |
Islamic Account | |||||
Negative Balance Protection | |||||
| Visit Website | Visit Website | Visit Website | Visit Website | Visit Website |
FXTM
In Summary Best all-around broker with high floating leverage and fast executionFXTM is a global broker specialising in CFDs and FX and was established in 2011. The company is considered reliable and trustworthy since it features regulation through the UK Financial Conduct Authority (FCA), as well as through Cypress Securities and Exchange Commission (CySEC). FXTM offers potential users several account options including live and demo account options. The FXTM Demo account offers traders a 100% risk-free trading environment and mimics their live trader accounts perfectly. The FXTM Demo account gives you all of the exact same features and financial instruments (including live quotes) that you would get when opening (or migrating to) an FXTM Live trader account.
Pros & Cons
- Excellent commission-based Forex pricing environment and transparency
- Upgraded MT4/MT5 trading platforms plus proprietary mobile trading app
- Quality market research and educational content for beginner traders
- A highly regulated broker with a tier-1 license
- No cryptocurrencies and limited choice of commodities
FP Markets
In Summary ECN trading with leverage up to 1:500Founded in 2005, FP Markets is a well-established and well-regulated CFD and forex broker based in Australia. The company is primarily regulated through the Australian Securities and Investments Commission (ASIC) and the Cyprus Securities and Exchange Commission (CySEC), with additional regulation through the Financial Services Authority of St. Vincent and the Grenadines. FP Markets offers plenty in terms of education tools such as their free demo account and eBook resources. Users are able to enjoy all of the tools and features of a live account, with an easy sign up process. However, it’s important to note that your demo account will only be available for 30 days from the time that you set it up.
Pros & Cons
- Choice of trading platforms and auxiliary trading tools
- Very competitive cost structure and excellent asset selection
- Low minimum deposit requirement and leverage of up to 1:500
- Well-regulated and trustworthy
- Availability of Iress geographically restricted
Eightcap
In Summary Competitive pricing + excellent daily videosWhile the Eightcap demo account has a default restriction of 30 days, traders can contact customer support to request necessary extensions, which unlock the full potential of demo trading. Eightcap offers complete flexibility during the account registration process for its MT4 and MT5 demo accounts, allowing traders to select parameters like account type, leverage, and demo account balance similar to planned live portfolios. It ensures that demo trading results are as close as possible to live accounts.
Eightcap also maintains quality educational content, allowing beginners to incorporate lessons while using Eightcap demo accounts for educational purposes, shortening the learning curve.
Pros & Cons
- Low minimum deposit and high leverage of up to 1:500
- Competitive cost structure
- Excellent technology infrastructure and seasoned management team
- Daily research and quality educational content
- Limited leverage in some areas
BlackBull Markets
In Summary Best ECN trading environment, with scalping and hedgingBlackBull Markets was founded in 2014 in New Zealand. Like many good demo account Forex brokers, BlackBull Markets is an ECN broker, offering raw spreads and commissions. It is regulated in New Zealand by the Financial Services Providers Register (FSPR). In addition to their global headquarters in New Zealand, BlackBull Markets also has presences in the form of branch offices in New York and Malaysia. BlackBull Markets offers a relatively tight range of tradable assets: 27 Forex currency pairs and crosses, gold, silver, crude oil, natural gas, and 6 major equity indices. That should be sufficient for those traders with more focused strategies not requiring wide diversification.
Pros & Cons
- ECN/NDD execution model with deep liquidity
- Institution-grade pricing for retail traders via proprietary price aggregation
- ZuluTrade and Myfxbook for social trading
- Leverage of up to 1:500
- Limited deposit options
AvaTrade
In Summary Highly regulated, choice of fixed or floating spreadsAvaTrade is one of the leading CFD and forex brokers in the world, and enjoys regulation in Ireland, Australia, Japan, South Africa, Abu Dhabi, British Virgin Islands, and Israel. First time users have the option of signing up for a live account or a free demo account. The demo account is very easy to set up, and offers all of the same features and tools that you would get when creating your live AvaTrade account. This includes all technical indicators and prices in real time. The AvaTrade Demo account equips users with $100,000 in virtual funds, allowing users to trade in real time and in a real world environment, and all trades are 100% risk-free.
Pros & Cons
- High-quality educational offering via SharpTrader
- Excellent choice of trading platforms catering to various trading needs
- Broad asset selection and cross-asset diversification opportunities
- Well-regulated and trusted broker with oversight from a central bank
- Trading costs competitive but nothing special
How to Find the Best Forex Trading Demo Account for You
The best Forex demo account is unlimited and without restrictions. It offers the same trading environment as a live account without the broker pressuring new traders to open a live trading account.
How to Open a Risk-Free Forex Demo Account
Almost all Forex and CFD brokers offer free demo accounts through their websites lasting at least 30 days. Usually, you must provide limited information to open the demo account, such as your email address, name, and telephone number.
Which Platforms Offer a Demo Account?
All commonly used trading platforms offer a demo account. Some proprietary alternatives may lack it, which depends on the broker.
Real Trading Account vs. Forex Demo Account
The most significant differences are the absence of trading psychology and false optimism. It can lead to counterproductive trading habits and losses in a live trading account.
Why Are Forex Practice Accounts So Important for Beginners?
They offer an opportunity to get to know a trading platform and a new trading environment. Traders can also test trading strategies, manual and automated ones.
Opening a Demo Account Helps You Choose a Broker
Trading a free demo Forex account can give you a partial exposure to the broker’s trading environment, such as the asset selection, policies and procedures, and the trading platform. It is likely that the quoted spreads, swap rates, and execution speeds will be less favorable in the broker’s real account.
Demo Account Alternatives
Traders may use pen and paper and conduct their testing that way. For learning purposes, a micro trading account with a $100 deposit remains the best choice.
Demo Accounts and Trading Psychology
To almost every trader, trading a Forex demo account and a live Forex real money account are two very different psychological experiences. As there is no real gain or risk possible in a demo account, the emotions of hope and fear that traders go through in the real market, cannot be fully replicated in a demo account. However, a Forex demo account still works as a learning tool, despite its psychological inauthenticity for most.
Demo Accounts and Account Size Management
Traders must select a demo account size that corresponds with their desired initial deposit to make the simulation realistic.
Moving from Demo to Real Money
After deciding on a broker, demo traders should take small steps. Using a micro or mini account with a small initial deposit is the smart next step to take. Patience holds the key to becoming a successful trader.
The Advantages of a Free Demo Account For Forex Trading
Understanding the advantages of a Forex demo account, also known as a practice trading account or paper trading, will allow traders to benefit from them. I recommend that new traders consider the below aspects:
A Forex demo account allows traders to test the trading environment of brokers.
It also offers an opportunity to experience the trading platform and learn its functionalities.
Another benefit is that traders can experience how trading costs impact profitability.
Traders can also test new strategies or tweak existing ones to see the difference.
A demo account is ideal for testing automated trading solutions before taking them live.
Developers use a Forex trading demo account to test their solutions and fix bugs.
The Disadvantages of a Trading Demo Account
Before blindly following the commonly accepted advice that one can learn how to trade in a demo account, I urge new traders to consider the below disadvantages.
It is impossible to simulate trading psychology, the most defining attribute that separates profitable traders from those who face losses.
The trading results of manual trading in a demo account will differ from those achieved in live trading.
A demo account creates a misleading sense of accomplishment and false confidence.
Most traders use a demo account and believe they learned how to trade, then make a deposit and lose money using the same approach, as trading psychology now takes control.
Many brokers do not offer traders to select a preferred account balance that reflects their desired deposit size. It adds to misleading trading results.
MT4 and MT5 Demo Accounts
The renowned MetaTrader 4 (MT4) and MetaTrader 5 (MT5) platforms both offer demo accounts as a means for traders to practice trading and test-drive forex strategies risk-free. Mimicking real-world market conditions, they enable account holders to learn how to successfully perform technical analysis and execute orders using real-time quotes, charts, and trading tools.
With MT4 or MT5 demo accounts, traders can benefit from all the MetaTrader platform services including copy trading. Signals and Expert Advisors from the MetaTrader Market are also available for demo accounts.
Traders can open a demo account using either the MT4 and MT5 desktop platforms, or the mobile applications.
Final Thoughts
A demo account offers traders with a simulated trading environment and allows beginner traders to train & practice, and the broker does not send placed orders to the market. Traders get exposure to price movements and trading costs without trading. It is ideal for new traders to experience how trading costs can impact profitability.
Forex demo trading is a great way to road test a Forex broker before making a deposit, and a useful tool to help you learn how to trade Forex profitably – all at zero risk, without having to deposit any real money or risk any losses.
Testing in the best demo trading account offers numerous benefits to all types of traders but learning how to trade is not one of them. The lack of exposure to trading psychology negates the learning process, as it remains the most defining part to master. A smarter choice to learn how to trade is a micro account with a small deposit and a 0.01 lot size.
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