Are you thinking of getting into trading but don’t feel you have the skills to risk your hard-earned cash? Why not give virtual trading a try? 

This way you can get a taste of the ‘real thing’ without spending any of your capital.

Continue reading to learn how to trade virtual funds like a pro and which platforms offer the best demo accounts.

What is Virtual Trading?

Virtual trading offers a simulated market environment giving you the chance to hone in your trading skills and invest in the stock market without actually putting real money in your account. Instead, you trade in virtual funds which you can top up or lose just as you would when trading with real cash. 

There are several benefits to virtual trading:

  • You can practise trading with zero risk—most of the top-rated brokers in Australia have demo accounts offering all the financial instruments, including CFDs, ETFs, stocks, crypto and indices, as a live account. You can then build and diversify your virtual portfolio by buying and selling assets.
  • A demo account mirrors real portfolio shares and provides access to real-life market prices and conditions which means you will get firsthand experience of what it takes to track the market.
  • You will get all the same features as a real account so you can get a good feel of how the platform works and what research tools are available. This will help you decide if that particular broker meets your needs or not.
  • Some stock trading simulators let you challenge your friends or other players so you can practise stock trading and have fun. Plus, the one who comes out on top of the leaderboard might even get cash prizes.

Who is simulated trading for?

Since virtual trading is a great way to get into the market, demo accounts and stock market games are very popular among newbies to investing.

However, they are used by more seasoned traders as well, especially when they want to test out new investment strategies without risking capital or when switching brokers—a demo account is one of the best ways to give a new platform a test run.

How to Trade Virtual Funds

Here are the steps to follow to get started with simulated trading. 

1. Find an online broker 

The first thing you need to do is find a broker that lets you practice stock trading for free. Luckily there are several online companies that offer demo accounts to new and existing users for free. 

In addition to flexing your trading skills, this is your chance to check out all the platform’s features, so don’t pick just any broker.  Instead, look for the same features you would expect from one of the best trading apps, such as:

  • A wide range of instruments to trade in, including forex and crypto
  • High-quality and easily accessible educational resources
  • Innovative and advanced analysis and research tools
  • Advanced market orders, including stop loss, guaranteed stop loss and market-to-limit orders

In addition to these, look for a broker that offers a generous amount of virtual funds to play with, preferably over $10,000. 

2. Open an account 

Once you choose your broker, it’s time to open your demo account. Although the process differs from one provider to the next, these are the steps that you usually need to follow

  • Open the broker’s website or download the mobile app;
  • Fill out the required information;
  • Some brokers will ask you to open a real account and then switch to demo mode. In this case, you might need to verify the account;
  • Start trading

3. Learn how to play the stock market

Since you are not risking any of your cash you can make the most out of your simulated trading experience and take as many gambles as you want to see how they pan out. This involves testing out some riskier short and long-term investing strategies, such as scalping and trend trading. 

In most cases, the demo account will have the same features as the live version, which means you can use the same analysis tools to monitor the performance of your portfolio and track the market. Once you feel comfortable with your skills, you can try them out on real-life markets. 

How is virtual trading different from a live account?

Although a stock trading simulator has the same functions as a live account, there are some crucial differences. 

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For one, your account is not subject to price slippage or out-of-hours movement, which can significantly affect trades. Lack of funds won’t impact your trades or account either—with a live account your trade could be rejected and your account closed due to insufficient funding. 

On top of that, you will not need to pay extra for charting packages, monthly maintenance fees, inactivity charges or commissions which traders with a live account might be required to cover every month. 

Finally and perhaps most importantly, emotions and risk tolerance are not the same when you are using paper and real money. Not being able to control emotions while trading leads to rushed and irrational decisions that could end up costing you a small fortune. At the same time, getting too used to a risk-free environment may make the transition to a live account harder.

Therefore, it is advisable to move on to a real account as soon as you gain some confidence. You don’t have to invest a huge sum from the get-go—start off small and invest more money as you gain experience and skills. Alternatively, you can try micro-investing, which works in the same way but requires a lower initial investment.

The Best Brokers for Practise Trading in Australia

There are several trading platforms in Australia that have demo accounts where you can virtually trade assets. Here is a brief overview of the best ones. 

1. eToro

  • Virtual funds: $100,000
  • What can you trade: Over 3,000 instruments, including stocks, crypto, commodities, forex, indices & ETFs

eToro, widely recognised as one of the best stock trading apps for beginners, gives absolute rookies the chance to practise trading in live market conditions with zero financial risk. 

eToro’s demo account comes with all the features of a live account, including real-time analysis tools, advanced market orders as well as CFD trading with leverage. If you have no ideas on how to get started, you could use the platform’s one-of-a-kind Copy Trading feature, which allows you to replicate the traders of the broker’s most successful users, or try out one of the ready-made themed portfolios. 

2. IG Trading

  • Virtual funds: $20,000
  • What can you trade: Over 18,000 markets, including indices, forex, shares, commodities, cryptocurrencies, bonds & options

Choosing IG to start your virtual trading journey will give you access to a huge variety of markets, as well as exclusive educational resources from the IG Academy to help you get started. You will also get all the tools and features of a live account, such as price alerts, advanced charts and real-time updates. 

To find out more about eToro, check out our full review.

What’s more, IG offers an MT4 demo trading account, allowing you to become familiar with one of the most popular trading platforms in the world, as well as access to leveraged CFD trading. 

3. CMC Markets

  • Virtual funds: $10,000
  • What can you trade: Over 10,000 markets, including indices, commodities, shares, ETFs, FX, share baskets & treasuries

CMC Markets is one of the top forex trading apps in Australia, offering live and demo CFD trading in more than 10,000 markets. 

Opening a demo account with the broker is fast, easy and safe—you will get approved instantly and start building your virtual portfolio in seconds. There is no expiry date on the account so you can use it even after you switch to a live version.

Plus, you can use CMC Markets’ advanced charting and trading tools, order execution and real-time news to experience all the benefits of leveraged trading with none of the financial risks. 

4. AVATrade

  • Virtual funds: $10,000
  • What can you trade: More than 1,000 instruments, including forex, indices, crypto, commodities, stocks, ETFs and bonds

AVATrade was one of the pioneers in CFD trading in Australia, leading the way in commodities, forex and crypto CFDs. Today it is still listed among the best CFD and options trading brokers thanks to its high-end security features, risk management tools and top-notch educational resources. It also has several trading platforms to choose from, including MT4, MT5, WebTrader, and the AvaTradeGo app. 

Users who opt for a demo account will get $10,000 in virtual funds to play with until they get the confidence to try out the real thing. 

How Is Virtual Trading Different From Stock Market Games?

Virtual trading apps and a stocks game are based on the same principle—you trade on the stock market with ‘pretend’ money. The difference is that with a stock market game app you can compete with friends or other players over who has a better-performing virtual portfolio. Here the focus is more on competition and having fun, rather than learning how to trade. 

Related reading: Are stock market investments the best option right now?

If you’re in the mood to test your trading skills against other players, here are a few stock market games you can try out. 

1. ASX Sharemarket Game

The ASX runs two share trading games each year, giving anyone, including school students, the chance to learn more about investing. Players are provided with $50,000 in virtual funds to invest in any of the 200 companies listed on the Australian stock exchange using real-life market prices and standard commission on each trade. 

Registration for the ASX Sharemarket Game will start on 9 February 2023.

2. StockWatch

Unlike the ASX Sharemarket Game which is held once a year, with StockWatch you can play the Australian stock market all year round in a risk-free environment. The game is completely free, easy to use and comes equipped with  tons of investing resources, profit and loss tracking and insight into your trading history. 

You can also see how your portfolio compares to other players and even win cash prizes based on your trading practices. 

3. Wall Street Survivor

This stock market simulator lets you explore the US stock exchange and find out if you have what it takes to buy and sell US stocks. It is free and simple to use, plus you get a generous $100,000 of virtual funds to invest in some of the biggest global companies in the world. 

Best of all, Wall Street Survivor has a wealth of educational resources available, including highly-rated free courses that can teach you more about ethical investing and reading financial statement analysis. 

 Bottom Line 

Stock market games and demo accounts are an excellent opportunity to speculate without risk or to put some theories into practice. 

However, it’s important to remember that they are not 100% like the ‘real deal’—you will likely have a different risk tolerance and desire to try new investment strategies when it comes to losing actual money. To avoid getting too comfy in a simulated environment, it would be wise to transition to a live account as soon as possible. 

1. Is there a free trading simulator?

Yes, you can use many trading simulators for free, starting with demo accounts with online brokers like eToro, AvaTrade and CMC Markets to stock games like StockWatch and the ASX Sharemarket Game. 

2. Is virtual trading safe?

Yes, virtual trading is safer than live accounts as you don’t deposit actual funds, but rather invest the virtual money provided to you by the broker.

3. Where can I practise trading?

You can practise trading by playing a stocks game or opening a demo trading account with online brokers. Using the features of real trading apps and taking risks will boost your confidence and give you the skills you need to tackle real-life trading. 

4. What is the best stock trading simulator?

There are several options available when it comes to how to trade virtual funds in Australia. Choosing the best one depends on your needs—if you are just curious about stock trading, try one of the stock market games. If you are a more serious investor who wants to give a trading platform a trial run or implement new strategies, most of the top brokers in the country offer a demo account with real-market conditions and quotes.