Best Forex Demo Accounts 2021
Brokers that offer demo accounts do so to enable traders to practice trading in a virtual environment before going live.
For forex traders, it is a chance to get to know the broker’s offering, market conditions, and the financial products to trade with. For the broker, it is a chance to learn the trading style, what to expect in the future in terms of commissions and earn the personal data to use later in marketing campaigns.
Top Forex Brokers With Demo Accounts
No expiration demo accounts are traders’ most preferred practice accounts since they save time and efforts when it comes to strategy testing over a long period of time.
In the forex market, some Forex brokers will offer a demo account that will expire within 30 days no matter what. Some will keep your account alive as long as there is trading activity in place (although a simple pause of a few weeks might result in expiration).
The best option is to have a Forex demo account that never expires!
But Forex brokers like to keep their client databases clean & filled only with active users. We can’t blame them either.
What Is a Demo Account?
A demo account is a virtual trading account used for practice. It comes in handy both for rookie traders as well as experienced ones.
When using one, traders get to know the broker and how trading with them could go. Therefore, it is a simulation of live markets, having similar conditions as the ones offered with a live account. It is, in a way, a broker’s free sample of its services, so the trader may decide if it is worth opening a live account or not.
How Can You Use a Demo Account?
The main use of a demo account is to learn the general market and broker’s conditions. It is the place to make mistakes for free, build a profitable strategy and implement it afterwards in a live trading account.
Experienced traders evolve with time. As the trader grows and gets more comfortable, they will look to try new strategies. A demo account offers a trading environment to test them before putting them into practice on a live one.
Pros and Cons of a Demo Account
- Learn the broker’s offering
- Free place to learn trading
- Find out the general market conditions, how spreads vary during various times of the day
- Build and test strategies without the pressure to succeed
- Sometimes the demo trading account conditions differ slightly from the live ones
- Grow bad habits
Factors to Consider When Choosing a Broker for a Demo Account
It is essential to know that in some cases, the demo accounts are sometimes set with an expiry date. For instance, a brokerage house may offer a demo account but only for a month or even less. The trader has the option to fund a live account after that period.
Another thing to consider that refers to market prices. Spreads and execution may slightly differ from real trading accounts, making it difficult to test automated scalping trading strategies, for instance.
It is always good to have access to a demo account, regardless of the trading style and or experience. It offers a way to test new strategies while having no risk of losing capital.
By having access to a demo account, it is a way to validate your decision to be a trader. Also to see if the broker you have the demo with can be a broker you feel comfortable with having your actual money in.
Is there any risk involved when trading on a demo account?
No. Trading on a demo account is risk-free, at no costs whatsoever for the trader.
Are commissions and other fees similar on a demo account and on a live one?
Yes. The demo account fully reflects the trading costs.
Is it complicated to open a demo account?
It depends from broker to broker. Typically no, this is a simple process requiring only basic personal information (email address, phone number, etc.)
How long does it take to open a demo account?
Not much. Most brokers can give you access to a demo account in a matter of minutes.
There are various other account types that brokers do offer, see below a list of some of the most popular:
- Demo Accounts
- Hedging Accounts
- IRA Accounts
- MAM, PAMM, & LAMM Accounts
- Mini & Micro Accounts
- Rollover Accounts
- Segregated Accounts