Best Paper Trading Accounts for Beginners 2021

Paper trading is the process of testing your trading strategies in a demo environment before investing with real money. See our list of the best trading platforms that offer a free paper trading environment.
Author: Nica

Last Updated: January 5, 2021
Paper Trading
Paper Trading

Trading is not as easy as most people think. While it offers high rewards, it involves significant amounts of risks. That is why you should look for trading platforms that provide paper trading accounts.

Paper trading can help you familiarize yourself with the concepts involved in trading, get access to all the features of a trading platform as well as test new trading strategies without investing real money.

Read on to learn what paper trading means, its benefits, the best paper trading platforms you can try and much more.

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Contents [show]

    How to Get Started with Paper Trading in 3 Steps

    Step 1: Create an Account

    eToro Index Trading

    Open a free trading account with our recommended broker. As part of the registration process, you will be required to submit your personal details for KYC.

    Step 2: Try Demo Account

    Open a trading account

    Begin trading on a demo account. A demo account allows you to trade in real-time but also learn about trading and understand basic terms.

    Step 3: Deposit Funds


    Once you have completed the registration and are happy with your paper trading strategy, you can transfer funds to your account and trade for real.

    Disclaimer: eToro - 62% of customer lose money when trading CFDs

    Step 1. Open a Paper Trading Account

    A paper trade is a simulated process that enables an investor to trade without risking real money.

    The term originated from the time before online trading platforms proliferated. Aspiring traders would practice on a paper before risking their investments on live markets.

    Nowadays, paper trading involves the use of an electronic simulator commonly known as a demo account. In most cases, the simulators look and feel exactly the same as the live stock trading or forex platform. Paper trading apps generally have free virtual paper money that you can use to test new trading strategies.

    Criteria used to pick our paper trading sites?

    Our review provider reviews are based upon the following factors:

    • Broker’s Reputation,
    • Availability of paper trading environment
    • Trading platform functionality
    • Charges and Fees

    Select one of the 5 providers below and sign up for a new account.

    Best Paper Trading Apps & Platforms

    1. eToro – Best Choice For Beginners

    eToro is a well-known trading platform established in 2007. It is considered safe because it is licensed by reputable regulatory agencies around the world. The platform has significantly grown, and it is probably the biggest online trading platform with more than 7 million clients.

    The eToro paper trading account is ideal for both novice and intermediate traders who are looking for a safe way to brush their skills without losing money. It is free and unlimited, which means you can use it for as long as you want. Also, it offers tools for self-teaching on a clean and intuitive interface.

    The process of registering on the paper trading account is straightforward. This is because the account will be activated immediately once you submit your information on the registration page. Alternatively, you can sign up through your Facebook or Google account.

    Apart from being free and with no time limitation, the paper trading account also comes with a $100,000 virtual currency. Even though other online software offer paper trading accounts, the support, tools and simplified access on eToro are unmatched.

    To switch from your simulator to the live account, click on the small button below your profile picture. It is designed to make it easy to switch between the two accounts. eToro live account has an outstanding copy trading feature that will enable you to replicate other traders' strategies.

    After learning and gaining confidence, you can start trading on the live account. The minimum deposit is only $200. However, for US and Australian residents, the minimum first deposit is $50. Also, all the subsequent deposits should be at least $50, no matter where you reside.

    Our Rating

    • Free and unlimited paper trading account
    • Simple registration process
    • Easy to switch between the demo and live accounts
    • Relatively high minimum deposit fee
    CFDs are complex financial instruments and 75% of retail investor accounts lose money when trading CFDs.

    3. CryptoRocket - Best for Cryptocurrency Trading

    Cryprorocket is a relatively new online trading platform. Although it puts a lot of emphasis on its cryptocurrency-related offerings, it also offers a wider range of assets. Its MetaTrader 4 (MT4) platform is also easy to use when using both desktop and mobile devices.

    Practicing is an indispensable part of the trading journey. To get familiar with what the site is offering, you are recommended to download and try the MT4 demo account. You don’t need to register or even deposit any funds to get started on the demo account. In addition, it is possible to have more than one practice account as long as you are active. The demo account offers real-life trading conditions and pricing, just like on the live account. If you encounter any issue, you can contact the customer support on the live chat.

    This trading platform is available for users all over the world, excluding countries with strict restrictions like the US. Some of its features and products may not be available in specific countries because of legal restrictions.

    Also, Cryprorocket offers safe and reliable web and app-based interface. The web-based platform can be accessed easily on any browser without the need to download or install additional software. On the other hand, the mobile app is available on both Android and iOS devices. By downloading the app, you access your paper trading account and trade on the go.

    Although, Cryptorocket is not regulated by any government agency, it is headquartered in Saint Vincent and Grenadines, which is a privacy-friendly country. It works very hard to ensure its platform is secure 24/7. In fact, its trading platform is monitored daily for suspicious activities.

    One of its key features is the Straight-through-Processing (STP) execution model. This means that you will not need to worry about re-quotes and desk intervention when placing a trade.

    Our Rating

    • 24/7 customer support
    • No deposit and withdrawal fee
    • STP execution model
    • Not regulated by government agencies

    Step 2. Learn how paper trading works?

    How does paper trading work?A paper trading app works in the same way as the live trading account. The only difference is that there is no real money involved in paper trading. This means that you can afford to make mistakes in your paper trading account without losing any money.

    Using a paper trading app is very simple. Log in to the trading software, filter and select the specific asset you want to trade. Next, decide at what price to trade the asset. For instance, if you intend to invest in stock trading at $13, make a buy order. Once the buy order transaction is complete, your account will have a record that you have bought the share. Once you’re ready to sell it, simply click the ‘Sell’ button and specify your selling price.

    After practicing for a while, you will be able to learn from your mistakes and improve your trading skills.

    Most online trading programs offer both paper trading and live trading accounts. The advantage of this kind of arrangement is that it is easy to switch between the two accounts.

    Benefits of Paper Trading

    • No risks involved

    There is no real money involved in paper trading. This means that you can’t lose money due to poor decisions or bad timing. Also, it enables you to observe and identify all of the mistakes in your analytical process so that you can start creating well-defined strategies.

    • Stress-free

    Since there is only virtual paper money involved, trading on the demo account can nullify both excitement and fear emotions of trading real money. This situation urges traders to quickly employ a trading plan as well as a set of trading strategies that can minimize the risks involved.

    Fortunately, there are no urgent and huge steps needed when paper trading, which enables new traders to focus on the analytical process of assessing stocks.

    • Good for practice

    Paper trading will help you learn everything involved in the trading process from the initial preparation steps to the trading part itself.

    Most simulators online offer free virtual money that can also help you come up with your own set of trading strategies.

    • Can boost your confidence

    It takes a long time for a novice trader to start making viable strategies. A trading demo account will enable you to perfect your trading strategies and gain the confidence you need to begin trading on the live market with real money.

    Disadvantages of paper trading

    • False sense of security

    Paper trading offers a false sense of security that makes new traders immediately try their strategies on the live market, which can result in huge losses.

    The nonconformity happens because there is no risk of genuine capital in paper trading. Also, paper trading only allows for simple strategies, like buying low and selling high. This is relatively easy on paper trading but very difficult to achieve on live trading.

    • Formfitting

    Most new traders using paper trading simulators pick out the easiest entries and exits. As a result, they miss out on a myriad of obstacles and challenges involved in the current computer-driven market.

    Features to Look for When Choosing a Paper Trading Platform

    • Order flexibility

    The first thing you should consider when selecting a paper trading platform is its order flexibility.

    The paper trading app should enable you to place limit, stop loss and execute other conditional orders just like you would on the live trading account. Some sites can even allow you to automate orders based on defined triggers and technical patterns.

    • Customizable analytical tools

    Don’t be afraid to try new chart patterns or technical indicators into your trading practice. The point of using paper trading is to learn how to trade like a professional. Technical analysis on the paper is one thing but seeing it in action is a different thing altogether. So, choose a paper trading platform that is loaded with plenty of analytical tools.

    • Intuitive interface

    A paper trading platform that is difficult to navigate will offer more frustrations than relief.

    Choose a paper trading platform with an easy to use interface and avoid anything that will require you to go through a lot of steps to execute a single trade.

    • Pricing

    Many trading apps offer free paper trading accounts while others require you to pay for real-time data or even the simulator itself. The cost will mainly depend on the information you want and the stock, CDF or future broker you are dealing with.

    You should look for free paper trading app that will not require you to create or fund your account.

    • Portfolio tracking

    Apart from giving you access to the same portfolio tracking as the live trading accounts, some platforms will enable you to see where you thrived and where you may have gone wrong. Choose a platform with such features, especially if you want to test out a lot of trading strategies e.g fundamental analysis, the Fibonacci trading strategy or trend trading etc.

    Paper Trading Tips

    • Trade as if you’re using real money

    Paper Trading TipsIt is imperative to trade as if you’re using real money when using a paper trading account. Otherwise, it won’t be of much good. When practicing on the simulator, you have the freedom to use as many virtual tokens as you want. However, it is advisable to use an amount close to what you will typically trade on a live account.

    Just because you can use up to $100,000 virtual money when using a simulator does not mean you should use it all at once. If anything, it will create a notion that it is ‘play money’. This will prevent you from making meaningful progress when practicing. Also, be realistic on how you approach trades. Work with the types of trades you would use on live trading and try as many strategies as you want.

    • Record and track your results

    Create a trading journal to track the strategies that you are able to test on the simulator platform. Concentrate and improve on the strategies that work and serve you best. This is a good way to develop a good habit when you start trading live.

    Remember that paper trading is only valuable when you think of it as live trading. So, keep a note of everything you do including entry and exit points, the shares you purchased, risk/reward ratio and almost everything you do.

    • Concentrate on honing your trading skills

    Paper trading should help you gain the confidence you need to trade on a live account. Since investing in the live markets is a bit scary, most people use paper trading as an excuse.

    Even though there is no perfect way to avoid making losses, making use of a paper trading simulator will help you understand different trading setups better. You can also quickly master your desired trading strategies.

    Step 3: Opening Your Paper Trading Account

    1. Here we provide an overview of how to sign up to your new trading account using eToro as a demonstration. The process involves KYC (know your client) information, this is typical of all trading companies. Once you open the account you can then transfer the funds and then you are ready to trade.

    eToro Sign Up


    2. The virtual profile indicated below is only available for verified accounts so you’ll need to complete all details. eToro will then let you switch the trading platform between the real and virtual portfolio environments as shown below.


    Select Virtual Environment



    3. If you need more information about a particular strategy, you can explore within the platform, which has a detailed knowledge bank. It tells you about the methodology, portfolio, allocation, and various data points related to performance. For new investor’s it’s useful to explore using the copy trading functionality, which lets you take advantage of the skills and expertise of experienced pro traders.



    4. Once you decide on the trading strategy that you want to follow, you need to decide on the amount that you are prepared to risk and set limits on your trading account in case the value of your investments falls below your pre-set threshold.


    Paper trading is an excellent way to try and test trading strategies. However, even the best trading simulators cannot be a substitute for live trading. You should also remember that paper trading does not guarantee success in real trading.

    Once you’re ready to start paper trading or trading using a real trading account, remember to check out eToro or one of our recommended platforms to get your trading program off to a good start.


    What are the key features of a great paper trading platforms?

    The best paper trading platform should be as close to a real live account as possible. So, choose a paper trading platform that offers plenty of functional features, intuitive interface, accurate market quotes and realistic user experience.

    What is the difference between paper trading and real trading?

    The only difference between a paper trading and a real trading account is the currency used. Paper trading simulators use virtual currency while live trading accounts involve real money. Generally, all the features found on the live account can also be found in your paper trading account.

    Who should use paper trading?

    Paper trading is particularly ideal for traders who are new to trading. Nonetheless, also experienced traders can use paper trading to try and test new strategies before implementing them on their live trading accounts.

    What is the best way to use a paper trading platform?

    To make the best out of a paper trading platform, you should create a trading plan. Record as much information as you can such as the opening price, closing price, etc. You should also use it to find out which trading strategy works best for you.

    Why is paper trading important?

    You can be a genius trader in theory but very poor in real trading. Paper trading helps you become a professional trader by giving you access to a real trading platform that has free virtual money that you can use to trade.

    Users should remember that all trading carries risks and users should only invest in regulated firms. Views expressed are those of the writers only. Past performance is no guarantee of future results. The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate. This website is free for you to use but we may receive commission from the companies we feature on this site.

    Nica specializes in financial technology and cryptocurrency. At her young age, she was already able to work with a Y Combinator-backed startup and another startup founded by Harvard graduates.