Our partner, XM, lets you access a free demo account to apply your knowledge.
No hidden costs, no tricks.
Stock trading/investing can be associated with a lot of risks. The markets are constantly volatile and an unexpected turn of events can burn investors and wipe out billions of dollars in shareholder value. As such, it is no surprise that many first-time investors are somewhat apprehensive about pledging their hard-earned capital to stocks. While countless risk-averse strategies and tools do exist, none can quite make for guaranteed results and ultimate safety.
Taking this into account, many stockbrokers and financial education platforms now offer virtual trading accounts, which are also called demo accounts. These accounts do not require actual money to operate and give users a simulated cash portfolio, as well as certain guidelines as to how to invest their “funds”. Users can try out different strategies and test their investing acumen to see how they may perform in the real world and what adjustments their strategies might need.
"With paper trading it's simulation trading, so it's fake money, but it really allows you it really gives the learner, the aspiring trader, you to really double down and focus on what's important.. because you're focused on learning how to trade;
the making money part comes after" - Ricky Gutierrez
If you are interested in learning more about virtual stock trading accounts and which ones are worth your time - this investfox guide is for you.
A virtual stock trading account, also known as a paper trading account, is a type of account that allows users to execute trades and hold positions in a simulated portfolio, without real money being at risk. This allows users to gain practical knowledge of stock trading and decide whether it is the best course of action for their financial objectives. Virtual traders can test different strategies and learn about new stocks and ETFs while bearing none of the risks associated with real stock investing.
Of course, virtual traders cannot claim ownership over any of the stocks, as they are not actually buying and selling anything. Virtual accounts are a great way to get the necessary practical trading knowledge before putting your funds at risk in real markets, which is a great convenience for millions of traders worldwide. The prices of stocks and ETFs on virtual trading platforms are tracked in real-time, which allows traders to continuously monitor the performance of their positions and analyze them in the exact same way they would a live account.
Investopedia is a popular financial education platform that offers thousands of articles about various financial concepts. Aside from the articles, Investopedia also offers a free stock simulator, which has become a popular tool for novice traders to practice their skills and accumulate practical trading experience. The stock simulator allows traders to trade stocks listed on the New York Stock Exchange and Nasdaq, as well as options and ETFs, all for free.
The Investopedia Stock Simulator offers users the opportunity to trade equities listed on U.S. stock exchanges. Whether an experienced trader or a total beginner, Investopedia is available for free, for everyone. The platform gives users $100,000 in simulated cash and gives them the freedom to invest in whichever stock they choose. Traders simply have to input the stock ticker and the number of shares and the platform will calculate the value of the trade in real-time.
The platform also gives traders the ability to compete with others and climb up the leaderboard of top performers. No deposit or bank account is needed. Other simulator users have no effect on the player’s portfolio, and they simply start out with the same amount of simulated funds and try to outperform each other on the market.
Users can also buy and sell put and call options, however, they are not allowed to write options.
While a very useful learning tool, the Investopedia Stock Simulator falls short in terms of variety. The game is very simple - users compete with each other and try to outperform by making profitable trades. The platform does not offer writing options and users are constrained by the rules of diversification, which does not allow them to place 100% of their funds in one asset, regardless of its potential future performance. This teaches traders to never palace all of their eggs in one basket and to diversify across multiple assets. The platform also does not consider the possible charges a stockbroker may charge per trade, but this is to be expected, as the stock simulator is only intended to serve the purpose of teaching beginner traders the basics of the stock market and buy and sell orders.
The platform is only available through the web and does not have a mobile app, which may be inconvenient for some users.
MarketWatch is a popular financial platform for stock traders which provides market data, watchlists, trading charts, company news, etc. MarketWatch also offers its Virtual Stock Exchange platform that allows traders to simulate portfolios and compete with friends and coworkers on the leaderboard. The platform is free of charge and does not involve trading real stocks. Individuals over the age of 16 are eligible to use the platform.
The MarketWatch Virtual Stock Exchange is a platform geared towards academia and is popular among business and finance students. Educators can use the platform to allow students to demonstrate their abilities in practice, which can be a rewarding experience for students learning about the stock market and how trading works.
Users can create watchlists, trade partial shares, place stop-loss and limit orders, or make a custom game with a specific budget while also enabling margin trading and short selling making things more interesting. Users have the option to make a custom game for the rest of the public to play. The platform also features a chat option for players to exchange ideas and strategies.
Users who want to play the game have to sign up with MarketWatch first, however, registration is free. While the platform allows for more complicated strategies, such as short-selling, it still only serves as a simulator for stocks and players need to rely on their own separate research to pick the best stocks for the game. Unlike a traditional stockbroker, the simulator has a relatively limited arsenal of technical tools, which is to be expected from a free piece of software. The virtual stock exchange also does not have a separate mobile app but is nonetheless optimized for mobile usage.
eToro is a popular commission-free securities brokerage that offers a demo trading account to its clients. Anyone who has registered with eToro can gain access to the demo, which includes all the basic features of eToro and allows traders to make transactions using simulated funds.
The eToro demo account allows traders who have registered with the broker to:
eToro clients can trade a wide range of assets using the demo account, including stocks, ETFs, indices, commodities, currencies, and crypto. Similarly to other stockbrokers that offer a demo account, the platform serves to sell the brokerage experience to customers by enabling early access to some of its features.
One thing that sets such demo accounts apart is the wide variety of assets traders can experiment with. eToro offers cryptocurrency trading as well, which can be an added bonus for traders who would like to trade crypto on the side.
Similarly to other demo accounts, the eToro demo is only available if you register and open an account with eToro, which can take a few days to complete. However, demo account users are not required to deposit their funds to gain access to the demo.
Another limitation of the eToro demo is the lack of complex analytical tools that come with the funded brokerage account. After all, the demo serves to give prospective traders a feel of what it is actually like to execute trades and manage your investments on eToro.
The Stock Trainer is one of the few mobile-only virtual stock trading tools that give users the opportunity to experience trading for free. The mobile app is available on iOS and Android devices and offers simulated trading on stock exchanges from 13 countries, with more expected to be added in the future.
The Stock Trainer app comes with an intuitive and user-friendly interface that allows users to easily navigate the app and start trading on their simulated accounts fairly quickly.
The app supports 20 stock markets from 13 countries and more additions are expected to arrive in the future.
The design is simplistic and achievements are easy to grasp for beginners. The app provides different ordering options, including stop-losses.
Users also have access to a wide range of business publications to stay on top of market news. The app allows users to create watchlists of stocks they are interested in. Additionally, they can check the top gainers and losers from the previous trading session and view the long-term price charts of each asset. The app also has a paid version, which grants users access to more complex tools and an ad-free experience.
The main drawback of using the Stock Trainer is the relative frequency of ads which can be annoying for some users. Ads can only be removed by purchasing the paid version of the app.
Another issue is the lack of support that comes with the app and users may not get swift answers to any questions they may have surrounding it.
Traders are not allowed to use real currency with the app, as the Stock Trainer is strictly intended for educational purposes.
The Wall Street Survivor is yet another popular educational website that gives users access to market data and educational content. The platform offers a free stock market simulator, which gives traders $100,000 in simulated funds to trade, compete with others, and win prizes.
Successful players can win cash prizes, which is an added bonus for players to actually make money while learning how to trade.
The Wall Street Survivor Stock Market Simulator gives players access to a simulated account with $100,000, where they can trade stocks, ETFs, cryptocurrencies, and options. The game includes real-time price quotes. The simulator is equipped with plenty of useful educational materials, as well as recommendations and the ability to interact with other traders.
The leaderboard consists of traders with the highest gains and portfolio value and top performers are rewarded with cash prizes.
When choosing a stock to invest in, users can read through plenty of articles and get recommendations from the Wall Street Survivor.
While Wall Street Survivor is a well-rounded educational platform, the game might be a bit more challenging due to the cash prizes involved, which adds more competition to the game and may shift the focus of some players from learning to competing, as the real stock market does not involve individuals competing against each other for capital gains. While introducing a competitive element to the game makes for a more engaged audience, it may detract from the learning experience for some users.
Virtual stock trading accounts are a great way to gather a working knowledge of how the stock market works without putting any actual cash at risk. Most stock simulators and demo trading accounts can be accessed free of charge and are equipped with all the necessary tools to execute trades and manage portfolios.
The biggest upside to using virtual accounts is the ability to trade thousands of stocks and ETFs in real-time and not have to worry about the outcome. This allows users to experiment with various strategies to find what works best for them and where they may be lacking.
Many stockbrokers offer demo accounts to prospective customers to try out their features and decide whether the technical tools and layout of the broker’s platform are optimal for them.
Overall, free virtual stock trading platforms, such as Investopedia’s Stock Simulator and the Virtual Stock Exchange by MarketWatch, are great tools for beginner traders who want to hone their skills before putting capital at risk with a real brokerage account.
Yes. Most, if not all, virtual stock simulators are available for free. Users can use these platforms to learn more about how the stock market works and how to manage their portfolios.
Virtual stock trading refers to using a platform that allows users to trade stocks and other assets using simulated funds. Some platforms give users $100,000 in simulated funds to manage and compete with other users on the leaderboard.
No. Virtual funds are for educational purposes only and users cannot actually buy and own stocks using these funds, as they are simulated.