Free online trading: our complete guide

We can never repeat it often enough, but online trading – in a securities account or from a regulated broker – is a financial business that presents many risks of major losses. This is why the vast majority of professional traders are graduates of higher education courses in applied finance at prestigious business schools (HEC, EDHEC, ESSEC), engineering schools (PolyTechnique, Centrale) and universities with a dedicated curriculum (Paris Dauphine, Paris VI – Pierre and Marie Curie). However, thanks to the democratisation of the Internet and the professions that rely on it, financial investment has become accessible to a new caste of more amateur traders. From his personal banking space or his client account opened with an online forex broker, it is now possible to trade from his living room, comfortably seated in a sofa.

If we have to look at things objectively, the risk of personal financial loss increases considerably with this kind of entry-level profile. Is it possible to reduce the chances of losing money with proper learning and practice? Is trading for free from a platform a solution to be considered? Why and how can we take advantage of this opportunity?

How can I learn to trade online for free?

There are several computer-based approaches to learning to trade online for free. Two main ones: the demo account on a platform managed by a regulated broker or an online trading simulator as offered by Admiral Markets. We will come back to these two options later in this article. The first question to ask is: what is the point?

free online trader

Although there are significant differences in the form of the two learning materials, they both serve the same purpose. Demo account and stock market simulator are a programme that allows you to learn how to trade online through practical training with fictitious money. The investor, whether a beginner or not, opens a virtual account and takes advantage of the more or less advanced parameters of the platform made available to him to practice trading for free in real (or reproduced as such) conditions. The creation of a demo trading account is an opportunity to trade for free without making a deposit.

Demo account or online stock exchange simulation?

Advantages of the demo account

This solution is offered by many regulated online brokers such as eToro, IQ Option, BDSwiss or AvaTrade. It is a choice that is offered to new registrants, mainly for beginners

The main advantage of a free online demo trading account is that it immerses the trader in real conditions: financial markets reproduced identically and in synchronisation on all Market Makers platforms / features similar to a real money account. The trader gets used, without any pressure, to his future workspace. The learning process is geared towards optimising the use of the broker for efficiency once switched to a real account.

The other particularly interesting aspect is the access to all (or almost all) of the catalogue of financial instruments available from the broker. You can thus specialise in forex trading easily or in CFD trading by choosing a broker who specialises in this type of product or stock exchange.

Advantages of the online stock exchange simulator

We quoted the Admiral Markets online stock exchange simulation in the introduction because it is exemplary of what such a programme should be. It is based on the well-known MetaTrader software. It is possible to create from the online trading platform a personal and personalised free virtual trading session. In a way you create your own free, 100% fictitious and totally secure trading site.

3 formulas are available

  • a standard version with the classic technical features of MetaTrader 4 (MT4). A version very suitable for beginners because it focuses on the essentials
  • an intermediate version, still based on MT4, with further technical analysis: Admiral Prime
  • Admiral MT5 which offers a very advanced stock market simulation with all the analytical options and configurations (trading robot for example) available from MetaTrader 5

An online trading simulator favours a configuration focused on your objectives, knowledge and training programmes: currencies, CFDs, ETFs. It is possible to set up very precise parameters in order to create a truly cutting-edge simulation.

It also makes paper trading accessible. This is virtual trading with no deposit and no real investment on the financial markets. Conditions are reproduced as faithfully as possible without any adverse impact.

With Admiral MT5 make things even more real by taking the experience one step further by reproducing a complete environment: the evolution of prices and the impact of trends on your financial investments / the weight of the various costs linked to the management of your asset portfolio: commissions, swaps, various brokerage fees, etc.

Some specialised sites, finance-oriented recruitment agencies and companies with expertise in stock market transactions offer stock market simulation games – trading games – with real money prizes to be won. These are contests, open to all in most cases, where traders sign up to trade for free and potentially win bonuses for the best performers. Playing on the stock market virtually becomes profitable under these very precise conditions.

The different types of simulation for free online trading

There are a few criteria to consider when deciding what kind of stock market simulator is right for your free online trading training goals.

Method of use

Two fundamental methods share the market for stock market simulations. They differ mainly in terms of their target audience.

Some financial market simulators play the imitation card. A complete and true copy of the stock market you are learning about. It is based on a simple algorithm, which produces software reactions that are relatively easy to follow. This method is highly recommended for beginners, or even intermediaries, who do web trading in parallel with another professional activity. It allows them to increase their chances of making interesting profits, on a particular asset, while limiting (or even reducing) the significant risks of losing money.

Other simulations are still free platforms, but they are also much more sophisticated. They offer an authentic online trading experience and foreign exchange markets. If your goal is to become an intraday forex trader, for example, and you are not a recent graduate from an illustrious university, it may be a good idea to take this approach. The indicators and parameters are much more comprehensive and complex. Trading for free without a deposit becomes an incredible opportunity to push your limits and your comfort zone in order to make the most of the different stock exchanges.

Financial assets

The second criterion to be taken into account is the fictitious investment possibilities that can be configured from the simulator. A global knowledge of stock market dynamics is essential. Despite this, the vast majority of professional traders have specialised in a particular type of financial asset.

We find the 3 most sought-after large families:

  • the stock market simulator in binary trading (or binary options: Call / Pull; Buy / Sell
  • the simulation of “classic” stock market trading: shares or Stock Market
  • the forex simulator for everything related to trading and exchanging currency pairs

The type of support

A last, lighter point but just as important. Define your online stock exchange simulator according to its compatibility on your different computer media: PC (Windows), Mac (iOS), iPhone / iPad (mobile iOS), Android (smartphone and tablet). The more flexible the software or trading game is, the easier it will be for you to play the stock market virtually from any medium with a browser with MetaTrader WebTrader.

free online traderement

Advantages and disadvantages of free virtual trading

Advantages

  1. The number one advantage over everything else: you don’t fear any loss of capital with a free online trading platform. You can therefore free yourself from much of the mental pressure that the trading profession can put on you. The learning and training is all the more qualitative since it is not obscured by the anguish of making the wrong choice. Learning to trade online for free allows you to make mistakes to progress without endangering your economic health
  2. In some cases, such as a trading game, you may even consider winning real money, in the form of endowments, if you win a good place in an investor contest. Trading online for free and winning real money becomes a possibility
  3. These competitions are open to all and are completely free of charge. This is a great opportunity to showcase your talent for asset management in real-life conditions and to broaden your knowledge of the many existing platforms
  4. In these competitive spaces, you are no longer alone when faced with the computerised reproduction of stock market prices. Other traders, like you, aim for excellence. You can therefore improve your techniques, analyses and strategies by observing other investors achieving significant and profitable performances

Disadvantages

  1. The absence of stress due to the risk of financial loss creates very different reactions to the decision to open a position or place a closing order. The trader is much less reluctant to make rash decisions, at least less motivated by strategic issues and the profitability of the trader’s account. The ability to replenish the demo account each time the funds are closed can relieve the trader of responsibility for the correct course of action
  2. Competitions are a very telling example since they are very often based on the performance of a virtual trader account rather than on the strategy used to achieve such results. Many participants enter with insufficient knowledge of online trading and take an approach much closer to casino betting than to consolidating and developing a stock portfolio. If your aim was to observe competent people, it may be biased
  3. More generally, the psychology adopted when dealing with a demo account is likely to be very different from that adopted with a real securities account or a regulated brokerage trading account. The lack of stakes allows for a more progressive and less punitive learning process, but it is also prone to the development of bad habits when dealing with charts and market analysis

The best brokers with a demo account

Below we present the 3 brokers that we believe offer the best online trading demo accounts: eToro, IQ Option, BDSwiss

eToro

Through the free trading site, when opening an eToro demo account, traders have access to over 70% of the financial assets available in a live account. The capital provided is quite substantial – €10k – and renewable. Online training courses (webinars, tutorials, blog, news and technical analysis) are directly accessible to make this virtual experience truly profitable. The CopyTrader and Copy Portfolio social trading features are also available for testing in real conditions.

IQ Option

The rising broker in the heart of all European investors offers an excellent fictitious account platform to get your hands on its wide catalogue of assets and its advanced functionalities. The virtual funds are renewable on a simple request for an in-depth and progressive learning process before getting into the swing of things. The only unfortunate thing is that it is not possible to test its famous trading robot. Only real money accounts can use it as its starting bet is $100 to start a standalone session. We strongly advise you to launch the IQ Option demo account before depositing money.

BDSwiss

This online trading platform is always getting incredible ratings from online financial market experts. Its demo version, for new registrants, contributes a lot to this. Comfortable revolving capital, financial instruments in spades (crypto currency, forex, commodities, CFDs) are accessible when creating the BDSwiss demo account for an immersive and formative experience.

Find our other articles to learn how to trade online: