5 Best Forex Demo Accounts in 2021

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Demo accounts remain a controversial topic, and a Forex demo account is no exception. The majority favors them as an educational tool, while a growing minority of profitable traders advises against it.  We have researched hundreds of brokers and identified some of the best Forex demo account brokers below.

1
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
Best all around broker
High floating leverage + fast execution
2
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
Commission-free trading on 3000+ assets
User-friendly proprietary platform with top-level analysis
3
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
ECN-style trading
Daily market research and Autochartist access
4
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
High level regulation in multiple jurisdictions
Impressive range of tradeable assets including vanilla options and gold options
5
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
Best social trading platform on the market
Excellent choice of options for crypto traders

FXTM, Best all-around: high floating leverage + fast execution.
Capital.com, Award-winning proprietary trading platform alongside MT4.
FP Markets, ECN trading with leverage up to 1:500.
AvaTrade, Highly regulated, choice of fixed or floating spreads.
eToro, Best broker for social traders and crypto traders : 75% of retail CFD accounts lose money.

FXTM

5.0/5 in this category
In Summary
Best all-around: high floating leverage + 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

Pros

  • 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

Cons

  • Limited choice of cryptocurrencies and commodities

Capital.com

5.0/5 in this category
In Summary
Award-winning proprietary trading platform alongside MT4

Capital.com was founded in 2016 and is a leading global Forex and CFD broker. Capital.com is regulated through the United Kingdom by the UK FCA (Financial Conduct Authority), CySEC (Cypress Securities and Exchange Commission), ASIC (Australian Securities and Investments Commission), and the NBRB, or National Bank of the Republic of Belarus. Capital.com offers both a live and a practice or demo account, allowing new users to try out what is on offer with no risk to their own funds. While you will not find an MT5 platform here, you will find a feature-rich platform for trading forex and CFDs (equity, index, crypto, commodity, forex) and Real Stock.

Pros

  • Excellent Forex and cryptocurrency selection

  • A competitive commission-free pricing environment

  • Award-winning proprietary trading platform alongside MT4

  • High-quality educational section built around Investmate

Cons

  • Leverage for FCA/CySEC clients restricted to 1:30

  • Limited deposit and withdrawal methods for many international clients

FP Markets

5.0/5 in this category
In Summary
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

Pros

  • 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

Cons

  • Availability of Iress geographically restricted

AvaTrade

5.0/5 in this category
In Summary
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

Pros

  • 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

Cons

  • Trading costs competitive but nothing special

eToro

4.5/5 in this category
In Summary
Best broker for social traders and crypto traders : 75% of retail CFD accounts lose money

eToro is an Israeli-based fintech firm originally known as RetailFX. eToro is a popular option for casual and professional traders interested in Stock, ETF, Forex, CFD, and Cryptocurrencies. eToro is regulated in several territories including Australia via the Securities and Investment Commission (ASIC), the United Kingdom via the Financial Conduct Authority (FCA), and via the Cyprus Securities and Exchange Commission (CySEC). New and experienced traders can take advantage of a free demo account, which allows users to fully evaluate all available features, tools and platforms that eToro has to offer. Setting up a demo account is very easy to do and, once set up, traders can enjoy all of the functions, options and features that would normally be included with an eToro live account.

eToro Pros & Cons

Pros

  • Active investment community ideal for social trading

  • Dedicated tools for social trading

  • Broad cryptocurrency selection

  • Expanding educational offering for beginner traders

Cons

  • Internal withdrawal fees

  • Low retail leverage and higher minimum deposits, but within a reasonable range

Top Forex Demo Accounts

Using a demo account to learn how to trade is like playing a flight simulator and believing it will teach one how to fly a plane. There are beneficial uses of a Forex demo account. They include testing a trading environment. It is also ideal for evaluating automated trading solutions and for trying new strategies. Developers also use demo accounts to identify errors and fix bugs. New traders who wish to practice trading with a free demo Forex account should select an account size like their planned live deposit. They must also understand that trading in a demo environment and live markets is different.

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.

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.

How to Open a Risk-Free Forex Demo Account

Almost all brokers offer it as an option on their website and require limited information.

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.

What is a Forex Trading Demo Account and How Does It Work?

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.

The Advantages of a Forex Demo Account

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 Forex 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.

What You Should Look for in a Forex Demo Account

A Forex demo account should reflect a live trading account as closely as possible and should be unlimited.

  1. Basic Layout vs. Integrated Layout: Traders can experience both and learn why most profitable traders prefer an integrated layout.

  2. Orders Placement: A demo account allows traders to understand the different order types and how to use them.

  3. Trade Reports: Trade reports offer a detailed analysis of placed trades and allow traders to fine-tune trading strategies.

Tips for Successful Forex Practice Account Use

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.

Opening a Demo Account Helps You Choose a Broker

Trading in a free demo Forex account grants trader’s exposure to the trading environment of the broker. It includes execution speed, spreads, swap rates and asset selection.

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

A Forex demo trading account cannot expose new traders to trading psychology, and therefore fails as a learning tool.

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.

Final Thoughts

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.

FAQs

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.

Huzefa Hamid

I’m a trader and manage my own capital. I trade the major Forex pairs, some Futures contracts, and I rely entirely on Technical Analysis to place my trades. Today, I am also a Senior Analyst for DailyForex.com. I began trading the markets in the early 1990s, at the age of sixteen. I had a few hundred British pounds saved up (I grew up in England), with which I was able to open a small account with some help from my Dad. I started my trading journey by buying UK equities that I had read about in the business sections of newspapers. The 1990s were a bull market, so naturally, I made money. I was fortunate enough in my early twenties to have a friend that recommended a Technical Analysis course run by a British trader who emphasized raw chart analysis without indicators. Having this first-principles approach to charts influences how I trade to this day.