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
Capital.com
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
2
FXTM
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
3
FP Markets
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
AvaTrade
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
eToro
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

Capital.com, Award-winning proprietary trading platform alongside MT4.
FXTM, Best all-around: high floating leverage + fast execution.
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.

Capital.com

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

Capital.com presents clients with a secure and trustworthy trading environment regulated in the UK, Belarus, and Cyprus. The MT4 trading platform caters to automated trading solutions, where it maintains a leadership position. Capital.com also offers traders its award-winning proprietary trading platform, an excellent choice for manual trading strategies. Forex traders get 138 currency pairs, making it one of the best choices based on available assets. Overall, Capital.com presents more than 3,000 trading instruments and is also home to one of the largest cryptocurrency selections with 200. Capital.com ranks among the top five brokers in both categories compared against all competitors.

Unique Features

Headquarters

Cyprus

Year Founded

2017

Type of Broker

Market Maker

Minimum Deposit

$20 or a currency equivalent

Maximum Leverage

1:30 retail, 1:500 professional

Type of Platform

MetaTrader 4, Proprietary platform, Web-based

Another notable benefit at Capital.com is the commission-free pricing environment. The minimum spread commences from 0.6 pips for Forex traders, which is $6 per 1.0 standard lot. Equity traders also get minimal mark-ups on 2,400 CFDs free of commissions. Beginner traders will find the high-quality educational section beneficial. It features Investmate, a mobile app that guides new traders through their learning process. Capital.com TV and the market commentary add value to the excellent core trading environment. The retail loss rate of 71.2% also places Capital.com at or near the top, a statement reflecting its educational efforts and competitive trading conditions.

Capital.com Pros & Cons

Advantages

  • 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

Disadvantages

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

FXTM

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

We have made FXTM our top-rated broker because in addition to its lengthy track record, it enjoys a very high level of regulation and reputation, and it offers a highly competitive fee structure which tends to keep down the cost of trading.

Unique Features

Headquarters

Cyprus

Regulation

CySEC, FCA, FSC, CMA

Year Founded

2011

Type of Broker

Instant/Market Execution

Minimum Deposit

$50

Maximum Leverage

Flexible

Type of Platform

MetaTrader 4, MetaTrader 5

FXTM, or “ForexTime”, has been around for a long time: they were founded in 2011. Recent years have seen them continue to steadily expand their business, and they are well- regulated by the U.K., Cyprus, Mauritius, and South Africa. The brand is owned by private companies incorporated in the U.K., Cyprus, and Mauritius. Customers of FXTM have access to more than 57 Forex currency pairs and crosses, precious metals, the major energies, equity indices, big cryptocurrencies, and a few individual American stocks. Talking of stocks, FXTM are quite unique in the area of trading stocks, as they enable direct trading through real legal ownership, not just wrapped as CFDs like almost every other similar brokerage offers.

FXTM offers traders a choice between two of the most popular execution models: customers may open either an ECN-type account, or one that trades by “straight-through processing”. Clients have a straight choice between two trading platforms, with both MetaTrader 4 and MetaTrader 5 on offer.

Through their Mauritius regulator, FXTM offer leverage as high as 1000 to 1. In the U.K. and Cyprus, they are limited by law from offering more than 30 to 1.

If you are looking for a broker with a good copy trading program, it is worth taking a serious look at FXTM’s “FXTM Invest” copy trading program.

FXTM Pros & Cons

Advantages

  • Excellent client deposit protection

  • Low minimum deposit

  • Free MT4 add-ons and VPS hosting

  • Good educational tools

Disadvantages

  • No cryptocurrencies or exotic currencies

  • Low leverage for retail traders

  • Internal withdrawal fees and an inactivity fee

FP Markets

5.0/5 in this category
In Summary
ECN trading with leverage up to 1:500

fpmarkets is an Australian brokerage which launched in 2005. Headquartered in Sydney, Australia’s financial capitol, they have carved out a solid niche for themselves as the best Forex / CFD broker enjoying ASIC regulation. Australian regulators are much more relaxed about leverage than their counterparts in the U.S.A., U.K., and the E.U. and so fpmarkets can offer a maximum leverage as high as 500 to 1.

For most traders, the standout unique selling point of this broker lies in the incredibly wide range of tradable assets offered, providing an opportunity to trade over ten thousand individual stocks and shares. These go beyond the typical U.S.A. and U.K. companies and include a good selection of publicly traded shares on the Hong Kong and Sydney exchanges, as you might expect from an Australasian-facing broker like fpmarkets. Also, over 60 Forex pairs and crosses, 11 equity indices, the major commodities, and 5 cryptocurrencies including Bitcoin are also on the menu here.

Unique Features

Headquarters

Australia

Regulation

CySEC, ASIC

Year Founded

2005

Type of Broker

No Dealing Desk

Minimum Deposit

$100

Maximum Leverage

1:500

Type of Platform

MetaTrader 4, MetaTrader 5, Web-based, IRESS

They offer an unusual hybrid ECN/STP execution model which means that their clients can choose between ECN style of execution giving a very high level of speed, and a “straight through processing” execution style which allows for more “natural” spreads.

Traders can scalp and hedge at this broker, whose fast ECN execution speed makes it a natural home for scalpers. Clients may choose between the MetaTrader 4 and MetaTrader 5 platforms, and shares can be traded through the IRESS trading platform which includes access to level 2 exchange data.

FP Markets Pros & Cons

Advantages

  • 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

Disadvantages

  • Availability of Iress geographically restricted

FP Markets is an Australian multi-asset broker with more than $1 billion in daily trading volume, serving clients from 80+ countries. Founded in 2005 in Australia, FP Markets grew into a trusted brand over the past 15+ years with more than 100 employees. The upgraded MT4/MT5 trading platforms, via the Trader Tools consisting of twelve plug-ins, present clients with a competitive edge. We have conducted an in-depth review of this CFD broker to provide traders with a complete overview of the trading environment at FP Markets.

AvaTrade

5.0/5 in this category
In Summary
Highly regulated, choice of fixed or floating spreads

AvaTrade was founded in 2006 in Dublin, Ireland. They are one of the largest and most famous Forex / CFD brokers in the world and became well-known for offering their clients a choice of fixed or floating spread cost of trading models. They enjoy an extremely high and strong level of regulation, making them a favorite for traders who are extremely nervous about the security of their deposit, which in Ireland can be protected by a strong investor deposit protection provision. AvaTrade is directly regulated in Ireland (and by extension, the European Union), Australia, Japan, South Africa, and the British Virgin Islands. Outside the European Union, Ava’s maximum leverage offered runs as high as 400 to 1.

Unique Features

Headquarters

Ireland

Year Founded

2006

Type of Broker

ECN/STP

Minimum Deposit

$100

Maximum Leverage

1:400

Type of Platform

MetaTrader 4, MetaTrader 5, Proprietary platform, Web-based

In addition to their longevity and safe reputation, clients know that through AvaTrade they have access to a broad range of asset classes through which diversification can be achieved successfully: AvaTrade offers trading in over 55 different Forex currency pairs, 17 commodities, 20 equity indices, 14 cryptocurrencies, plus 66 individual stocks and shares. Even better, and unusually, 2 bonds and 6 ETFs are also on the menu. The diversity offered here stands out.

Whether you are located within the European Union or not, all branches of AvaTrade will offer you negative balance protection, above and beyond what is mandated by the law. This means that under no circumstances will any client of AvaTrade ever be held liable by the firm for an amount larger than their deposit.

 

AvaTrade Pros & Cons

Advantages

  • Well-regulated globally, with the Bank of Ireland, the primary regulator

  • Low minimum deposit and in-depth educational tools

  • Wide asset choice across seven sectors

  • Superior mobile trading platform

Disadvantages

  • Low leverage for retail traders

  • High quarterly inactivity fee

  • Unacceptable cost for AvaProtect

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 was founded in the early days of the online retail Forex era, in 2007 – this broker occupies a unique space as the king of social and copy trading. eToro has a long track record and unique reputation to protect, although this image is more focused on its copy trading model than on any other individual feature, except maybe its special relationship with cryptocurrencies. 

Unique Features

Headquarters

Cyprus

Regulation

CySEC, FCA, ASIC

Year Founded

2007

Type of Broker

Market Maker

Minimum Deposit

$200

Maximum Leverage

1:30

Type of Platform

Proprietary platform

eToro is regulated in Cyprus, the U.K., Australia, and the United States although its U.S. offering is firmly differentiated from its offering to the rest of the world.  

eToro guarantees several benefits to anyone opening an Islamic account: no rollover interest or commissions on any trade contracts lasting for longer than 24 hours will be charged, and no commissions or fees are charged to Islamic accounts for account management. Notably, interest-free leverage is also offered to Islamic account holders. 

eToro is a leading cryptocurrencies CFD broker. Following its 2019 acquisition of Danish blockchain company Firmo and Belgian crypto portfolio tracker application Delta, it released its cryptocurrency wallet for mobile devices. The proprietary sentiment indicator for digital assets based on Twitter activity presents a social trading tool millennials favor.

eToro Pros & Cons

Advantages

  • Excellent equity asset selection and broad cryptocurrency choices

  • Cryptocurrency wallet for Android and iOS

  • Twitter-based digital asset sentiment indicator

  • Simple social trading procedure

Disadvantages

  • Below average educational resources

  • Internal withdrawal fees plus higher core trading costs

  • MT4 trading platform not supported

  • Low leverage and higher minimum deposit

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.