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.
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.
High floating leverage + fast execution
Daily market research and Autochartist access
Trade 1,000+ financial instruments
Experience low, competitive spreads
Multiple funding and swift withdrawal options
Solid broker for scalping and hedging
Institutional-style trading opportunities for retail traders
High level regulation in multiple jurisdictions
Impressive range of tradeable assets including vanilla options and gold options
- 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.
5.0/5 in this category
Best all-around broker with high floating leverage and fast execution
FXTM 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.
FXTM 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
Proprietary copy trading platform, low minimum deposit, and high leverage
5.0/5 in this category
ECN trading with leverage up to 1:500.
Founded 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.
FP Markets 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
5.0/5 in this category
Competitive pricing + excellent daily videos
Eightcap 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
4.5/5 in this category
Best ECN trading environment, with scalping and hedging
BlackBull Markets was founded in 2014 in New Zealand. Like many antipodean Forex brokers, BlackBull Markets is an ECN broker, offering raw spreads and commissions. They are regulated in New Zealand by the Financial Services Providers Register (FSPR) and offer a maximum leverage on some Forex currency pairs as high as 500 to 1. 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.
BlackBull Markets 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
4.5/5 in this category
Highly regulated, choice of fixed or floating spreads
AvaTrade 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.
AvaTrade 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
Aside from the lack of any real risk, there are significant differences between a demo account and a real money account. Any broker’s real account will occasionally show spreads widening under illiquid market conditions, and trade entries and exits may suffer from slippage or requotes. Additionally, trading with real money at risk is psychologically different from paper trading without risk in a demo account, so as a trader you are likely to feel more pressure in a real account and you may find yourself trading differently as a result. For these reasons, a demo account cannot prepare you 100% for real trading, but a demo account can give you:
- Access to good Forex trading practice.
- Familiarity with a broker.
- Familiarity with a trading platform.
- An environment to test new trading strategies.
New traders who wish to practice trading with a free demo Forex account should select an account size similar to what they plan to eventually deposit as funds into a live, real trading account.
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.
Most brokers aim to simulate live trading as close as possible but trading psychology will always remain missing from the equation. Therefore, even the trading results in the best demo trading account will not display accuracy unless traders tested an automated trading system.
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.
All commonly used trading platforms offer a demo account. Some proprietary alternatives may lack it, which depends on the broker.
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.
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.
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.
It offers traders a simulated trading environment, 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.
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.
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.
A Forex demo account should reflect a live trading account as closely as possible and should ideally not be subject to any time limitation.
Basic Layout vs. Integrated Layout: Traders can experience both and learn why most profitable traders prefer an integrated layout.
Orders Placement: A demo account allows traders to understand the different order types and how to use them.
Trade Reports: Trade reports offer a detailed analysis of placed trades and allow traders to fine-tune trading strategies.
Here are some tips to get the most benefit from a practice trading account:
Testing all order types allows traders to pick the ones most suitable for their strategy.
Familiarity with the platform's features remains a requirement before trading live.
Leverage level selection will display the importance of risk management. It also aids in the fine-tuning of a trading strategy.
Instrument selection offers traders to learn the importance of cross-asset diversification.
Lot size management is one of the most underappreciated aspects of trading.
Trading strategy testing, evaluating, and fine-tuning in a demo account remains one of the most-used reasons why experienced traders maintain a demo account.
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.
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.
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.
Traders must select a demo account size that corresponds with their desired initial deposit to make the simulation realistic.
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.
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.
What is the best Forex demo account?
The best Forex demo account is unlimited and offers traders to select their account balance.
What is a demo account in Forex?
A demo account in Forex allows traders to test various aspects of the trading environment, trading strategies and automated trading solutions.
How do I open a Forex demo account?
Most brokers offer it on their website free of charge.
Which broker has the highest leverage in Australia?
There are several Forex and CFD brokers in Australia offering the highest leverage allowable under Australian law. The leverage is currently capped at a maximum of 30:1 for Forex currency pairs and 20:1 on other CFDs.
Can I use MT4 in Australia?
Yes, you can easily use MT4 as this trading platform is offered by almost every Forex and CFD broker in Australia, just as it is in the rest of the world.
Are Forex demo accounts safe?
Forex demo accounts are very safe because they hold no real money, but only virtual funds.
Can you withdraw money from a Forex demo account?
No, you cannot withdraw money from a Forex demo account, as demo accounts do not hold any real funds.
Are Forex demo accounts free?
Yes, Forex demo accounts are free, but registration is usually required to open one which means providing a telephone number and email address.
How do I start a demo trade?
Opening a demo trade is done through the trading platform which you are using to access the demo account. You open a trade by placing an order to go long or short at the market price, or at another price away from the current market price.
How long should I trade demo?
A good rule of thumb about how long you should trade demo is until you have been profitable over six consecutive months. At that point, you should move to a small real money account.
Is a demo account same as a real account?
Demo accounts and real accounts do not behave the same way. When you trade a real account, you and your broker are undertaking some risk, so wide spreads, slippage, or even requotes are possible. You will not see any of those three things happening in a demo account. A realistic trading simulator would include them.
Is demo trading accurate?
As trading conditions in real money accounts are always worse than in demo accounts, demo trading is not accurate as it tends to overestimate profits and underestimate losses. For scalping or other retail high-frequency trading, demo accounts are especially inaccurate, but longer-term traders who are profitable in demo.