Practice trading risk-free: Stock simulator or demo account? Here's the difference

Do you want to learn how to invest without losing real money? Many beginner traders feel overwhelmed by this question. The good news is that there are two paths: the traditional stock simulator and the broker’s demo account. But they are not the same, and choosing wisely makes the difference between effective practice and wasting time.

The two tools you need to know

Although they seem identical, there is a crucial detail. Stock simulators are independent educational platforms created by institutions focused on training. The stock simulator you find on MarketWatch or HowTheMarketWorks work like this: they give you virtual money, you practice moves, and learn about markets without direct connection to a real broker.

Demo accounts, on the other hand, come directly from the broker. Here, you not only practice with virtual money but also experience exactly how it will be to operate on the real platform: same tools, same execution speeds, same interface. It’s the closest training to reality.

Which one to choose? It depends on your goal

If you are completely new: A stock simulator helps you understand basic concepts without pressure. You can learn what indices, forex, stocks are, and how to buy them.

If you already have some knowledge and want to test strategies: A broker’s demo account is your ally. You will have access to CFDs, cryptocurrencies, ETFs, and commodities. The practice will be much more realistic.

The ideal is to use both: start with the simulator for the basics, then practice on the demo account once you know what to do.

The assets you can practice

In a standard stock simulator: national and international stocks, indices, currency (forex).

In an advanced broker demo account: all of the above plus CFDs, cryptocurrencies, ETFs, commodities, and in some cases, fixed income.

5 platforms to practice right now (all for free)

eToro: If you prefer social trading, this is your platform. The demo account gives you access to all its community resources. It’s not the most sophisticated, but it’s simple and works well for beginners.

IG: One of the oldest and most respected brokers. Its demo account works on MetaTrader with access to thousands of CFD assets. Includes comprehensive educational resources.

MiTrade: Offers what many seek: unlimited demo time, $50,000 virtual, and availability on web and mobile app. You can switch between demo and real account without issues.

MarketWatch Virtual Stock Exchange: A classic for learning about stock simulators. Connects you with thousands of investors sharing analysis. Simple and free registration.

HowTheMarketWorks: The original educational stock simulator. Trains half a million students annually. Comes with $100,000 virtual and is designed especially for team learning.

The problem that almost no one mentions: “false confidence”

Here’s the advice that will change your results: when you have $100,000 virtual in your account, you invest differently. You take risks you would never take with your real money. And that tricks you.

There’s also the opposite effect: when you finally invest real money and only have $1,000, the psychology changes radically. You become more cautious. More meticulous. Your actual operations will be very different from what you did in the virtual account.

That’s why the most important thing is not just practicing, but practicing as if it were real money. Pretend that the $1,000 virtual is your last savings. This will train your mind, not just your hands.

How to start in 3 steps

1. Choose a platform: If it’s your first contact, opt for a simple stock simulator (HowTheMarketWorks or MarketWatch). If you already read technical analysis, jump directly to a broker’s demo account.

2. Register and observe: Don’t jump into trading immediately. Spend a week just observing how charts, orders, commissions (yes, even in demo) work.

3. Trade as if it were real: Keep a record of your trades. Analyze why you won or lost. Repeat this 50 times before using real money.

The secret of professional traders

Here’s what’s important: fund managers and professional traders use demo accounts and simulators constantly. Before moving millions in the open market, they test in a virtual environment.

It’s not just for beginners. It’s for smart people.

Conclusion: The best investment is in your education

Demo accounts and stock simulators are perhaps the most underrated financial tools. They are free, eliminate risk of real money, and allow you to make mistakes without consequences.

The market doesn’t wait. Every day you don’t practice is a day others are gaining experience. You don’t need permission or initial money to start.

Open your demo account today. Practice without pressure. When you feel ready, real money will be waiting for you.