DEFINITION of 'Demo Account'

A trading account that allows an investor to review and test the features of a trading platform before funding the account or placing trades. A demo account is typically "funded" with simulated money, which allows the investor to conduct fictitious trades in order to become familiar with the ins and outs of the platform.

BREAKING DOWN 'Demo Account'

Demo accounts can allow a trader to experiment with a wide array of financial products, such as options, futures, forex and other derivatives. In addition to allowing an investor to become familiar with the available tools, it provides a way to test different trading strategies, such as carry trades in forex.

RELATED TERMS
  1. Forex Account

    Opening a forex account is the first step to becoming a forex ...
  2. Currency Trading Platform

    A currency trading platform is a type of trading platform used ...
  3. Trading Platform

    A trading platform is a software through which investors and ...
  4. Trading Account

    1. An account similar to a traditional bank account, holding ...
  5. Managed Forex Accounts

    A managed forex account is a type of forex account in which a ...
  6. Fictitious Trade

    A fictitious trade is a trade that is booked with an execution ...
Related Articles
  1. Trading

    Demo Accounts: An Indicator of Investing Skills?

    Scoring huge profits in a demo account doesn't mean you'll get the same results in real trading.
  2. Trading

    Forex: Demo before you dive in

    Master demo trading so you are used to the platform and to making trades before risking real money.
  3. Investing

    Beginner's Guide To ScottradeELITE Online Trading

    Learn how to build your investments with Scottrade's advanced online trading platform.
  4. Trading

    Beginner's Guide To FXCM And Trading Station

    From signing on, to charting and trade management, learn how to trade the forex market with FXCM's online trading software.
  5. Trading

    10 Ways to Avoid Losing Money in Forex

    When approached as a business, forex trading can be profitable and rewarding. Find out what you need to do to avoid big losses as a beginner.
  6. Trading

    Stimulate Your Skills With Simulated Trading

    Think you can beat the Street? We'll show you how to test your abilities without losing your shirt.
  7. Investing

    The Biggest Financial Market You've Never Heard Of

    Though many traders aren't familiar with it, the forex market is is actually bigger than the NYSE in many ways.
  8. Investing

    Simulator How-To Guide

    A stock simulator allows you to use fake money on real stocks. Learn how to buy a stock watch the result.
RELATED FAQS
  1. What types of accounts are available for forex trading?

    There are many different types of forex accounts available to the retail forex trader. Demo accounts are offered by forex ... Read Answer >>
  2. How safe are money market accounts?

    Learn the difference between a money market account and a money market fund. Both savings vehicles are relatively safe, but ... Read Answer >>
  3. What is the difference between the current account and the capital account?

    Learn how to differentiate between the capital account and the current account, the two components of the balance of payments ... Read Answer >>
Hot Definitions
  1. Working Capital

    Working capital, also known as net working capital is a measure of a company's liquidity and operational efficiency.
  2. Bond

    A bond is a fixed income investment in which an investor loans money to an entity (corporate or governmental) that borrows ...
  3. Compound Annual Growth Rate - CAGR

    The Compound Annual Growth Rate (CAGR) is the mean annual growth rate of an investment over a specified period of time longer ...
  4. Net Present Value - NPV

    Net Present Value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows ...
  5. Price-Earnings Ratio - P/E Ratio

    The Price-to-Earnings Ratio or P/E ratio is a ratio for valuing a company that measures its current share price relative ...
  6. Internal Rate of Return - IRR

    Internal Rate of Return (IRR) is a metric used in capital budgeting to estimate the profitability of potential investments.
Trading Center