A demo account is the practice version of a trading account: the same platform, the same charts, the same prices, only the money is virtual. Regulated brokers open one for free and it is the only way to try forex without depositing your own money — no-deposit bonuses are banned in the European Union.
How much the demo is worth, though, depends entirely on how you treat it. Anyone who risks half the account on a single virtual trade is practising exactly the habits that later cost real money.
What a demo really does teach
The platform and the orders. Before you send real money to the market you should be able to place a market and a limit order blind, move a stop-loss, close half a position and find your trade history in the platform. That is a mechanical skill and a demo is perfect for it.
Your own system. A demo is where you find out whether rules that look good on paper hold up in a live market. That takes a decent sample — not three trades but thirty to fifty, and ideally across different conditions: in a trend and in a range, in quiet hours and during data releases.
The choice of broker. You get to see the spreads, how quickly the platform reacts, whether the window layout suits you and how support answers. Running demos at two brokers at once and placing the same trade on both is the fastest comparison there is.
What a demo will not show you
This is where you have to be specific, because the generic “a demo is not a live account” helps nobody.
Order execution is simplified. IG’s documentation states that demo trades are not subject to slippage, interest or dividend adjustments. XTB states that execution on its test platform does not take market depth into account, so it always happens at the current price and the size of the transaction has no effect on it — on a live account it does. Interactive Brokers adds that stop orders and more complex order types are always simulated in practice mode and may behave somewhat differently than they would live.
Holding costs may be missing. Whether a demo charges swaps on overnight positions differs from broker to broker: IG states its demo trades are not subject to interest adjustments, and XTB that dividends and other corporate actions are not paid on demo accounts. For a strategy that holds positions for weeks, financing is the single largest cost. Check it with your broker before you draw any conclusion from demo results.
A demo cannot simulate emotion. A two-hundred-dollar virtual loss gets clicked away, a real one does not. Fear arrives, so does the urge to win it straight back and the doubt about a system that had been working. You cannot fully prepare for it — but knowing it is coming softens the blow.
Five rules that make the practice worth something
1. Set a realistic balance. Brokers offer demos with 100,000 dollars because it looks tempting. If you plan to start with five hundred, open the demo with exactly five hundred. Otherwise you are practising something other than what you will actually do.
2. Risk as if it were live. One to two per cent of the account per trade at most, and a stop-loss on every position, no exceptions. On a demo it is tempting to risk more because “nothing is at stake” — and that is precisely how you build the habit that will cost you money later.
3. Keep a journal. For every trade: the instrument, the reason for entry, position size, stop-loss, result and one sentence on what went well and what did not. Without a journal, fifty trades tell you nothing, because a month later you will not remember why you took them.
4. Do not change the rules mid-test. A strategy is judged after a decent sample, not after every losing position. Jumping between markets and systems — forex today, crypto tomorrow — is the surest way never to collect a sample you can read anything from.
5. Treat contests as training, not as a game. Broker demo contests force you to stick to a plan and show where you stand against others. Risking absurd amounts to win one means practising exactly what you do not want to do with real money.
How much leverage the rules allow
Leverage is not a broker setting but a regulatory cap — and on a demo you should set it to the same level you will use live. For ordinary (retail) clients in the European Union:
| Underlying | Maximum leverage | Initial margin |
|---|---|---|
| Major currency pairs | 1:30 | 3.33% |
| Other currency pairs, gold, major equity indices | 1:20 | 5% |
| Other commodities and non-major indices | 1:10 | 10% |
| Individual shares and other underlyings | 1:5 | 20% |
| Cryptocurrencies | 1:2 | 50% |
Watch out for a common misunderstanding: gold is not one of the “commodities at 1:10”, it has its own 1:20 tier. And these limits are no longer held up by ESMA — its measure expired in 2019 and national regulators have enforced them with their own rules ever since. In the United Kingdom the FCA made an equivalent set of limits permanent, so the tiers a British trader sees are the same.
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk.
When to move to a live account
There is no universal deadline, but there is a sensible signal. The move makes sense when the demo shows consistent positive results over two to three months, you follow your own rules without exceptions and you have a written trading plan.
Staying on a demo for years, on the other hand, makes no sense at all. After a while it stops serving its purpose precisely because the emotional part is missing. The ideal move is to a live account with the smallest amount and the smallest position size you can trade — a micro lot in forex — so that the psychological jump is as small as possible.
And the other way round: if the conditions are not met, another month on the demo is not wasted time.
What to check before you open one
How long it lasts. Saxo offers a demo for twenty days. XTB states on its education page that the account becomes inactive after thirty days but that the validity can be extended and a client may keep the demo indefinitely — while its own help centre says the demo does not expire at all. Which is exactly why it is worth checking with the broker directly rather than in a comparison table.
Whether the demo runs on the same platform as the live account. Practising in a different interface from the one you will trade in loses half the benefit.
Whether the demo runs on live data. Without that you are practising on something that has nothing to do with the current market.
Demo accounts and the rules
With no-deposit bonuses banned, the demo is the only legal way left to try the market in Europe without your own money — why the bonuses disappeared is a story we told separately.
One thing belongs with it, though: an open demo account is not proof that you understand the risk. ESMA treats it as poor practice when a broker uses the opening of a demo as the basis for concluding that a client understands the product without checking whether the client ever used it. A broker may count the demo only if it can show the client actually traded on it for long enough and in comparable instruments — and anyone who fails the appropriateness test and is sent to a demo must, under ESMA’s guidelines, be assessed again.
So the line between practice and genuine knowledge is drawn not just by common sense but by European rules as well.
Regulatory details verified as of August 2026 against ESMA and FCA documents; demo account terms according to each broker’s own documentation.