Demo account: practise trading with virtual funds

A demo account is a practice account. It runs on a trading platform with prices that follow the market, but the money in it is virtual. When a demo trade gains or loses, nothing changes in your bank account.

NextTrade offers demo accounts with $10,000 of virtual funds, so you can practise before trading with real money. A demo account is sometimes called a practice account or paper trading. A live account, by contrast, holds money you have deposited, and every gain or loss on it is real.

A demo is a learning tool, not a game to win. Its value comes from what you learn about the platform, about orders and about your own habits, not from the virtual balance.

Most of the mechanics of trading can be learned on a demo without putting money at risk. Useful things to practise include:

• Finding your way around the platform: charts, the symbol list, the order window and the positions panel.
• Placing market orders and pending orders, and changing or cancelling them.
• Setting a stop loss and a take profit on every trade, and moving them.
• Reading the spread, and seeing how commission and swap appear in your account history.
• Watching how margin, free margin and margin level change as you open and close positions.
• Choosing a position size by working out how much a given price move would cost you.

Mistakes are part of learning. Typing the wrong volume or forgetting a stop loss on a demo costs nothing, and it shows you which steps you need to check before every order.

A NextTrade demo account starts on the same registration page as a live account, in the NextTrade client area. You can register for a demo account here, or use the button at the end of this guide.

1. Open the registration page and create your client area login.
2. Follow the steps in the client area to set up practice trading with virtual funds.
3. Log in to the trading platform with the demo details you are given and start practising.

Treat your demo login like any other password: keep it private. If you later open a live account, it is a separate account with its own details.

A demo uses prices that follow the market, but it cannot copy every condition of live trading. Knowing the differences helps you read your demo results honestly.

Execution and fills

On a live account, an order is filled at the best price available when it reaches the market. In fast markets, for example around major economic news, that price can differ from the one you saw. This is called slippage, and it can work for or against you. A stop loss closes a position at the next available price once its level is reached, so in a sudden move the loss can be larger than planned. A demo may not show these effects in the same way.

Emotions and decisions

Losing virtual money is easy to shrug off. Losing your own money is not. Many traders find that on a live account they hesitate to close a losing trade, move a stop loss further away, or take profits too early. A demo cannot recreate that pressure, so a calm demo record says little about how you will behave with real money.

A demo teaches more when you use it the way you would use a live account. Some habits that help:

• Practise with an amount and a position size that match what you could realistically afford to lose, not with the whole virtual balance.
• Write down why you open each trade, where your stop loss is, and what happened. A short trading journal shows patterns quickly.
• Count costs. Look at the spread, commission and swap on each trade, not only the price move.
• Practise for long enough to see losing periods as well as winning ones.
• Do not reset the account after a bad run just to get the balance back. Ask what went wrong instead.

There is no set point at which a demo trader is ready to trade live, and a demo record is no promise of live results. Before you decide, it helps to be able to answer these questions:

• Do I understand how leverage and margin work, and what a margin call and a stop out are?
• Can I place, change and close orders, including a stop loss, without mistakes?
• Do I know what each trade costs in spread, commission and swap?
• How much money could I lose without it affecting my everyday life?

Read the risk disclosure before you open a live account. CFDs are complex instruments and come with a high risk of losing money.