Online trading can be confusing, especially for beginners. There are so many trading terms to learn, a wide range of markets and products to understand, and, of course, one needs to find a trading strategy that will work for them.

An online trading demo account can help you work through the basics in a risk free environment. It allows you to familiarise yourself with different trading platforms and enables you to practise trading skills and strategies using virtual funds.

You can create a demo account on all of Deriv’s trading platforms. You can get started with  10,000 USD virtual money, which you can top up any time you run out. You’ll be able to open positions on your preferred trading platform to get a good grasp of how it works and explore the available assets to trade. 

Also, with a demo account, you can:

Learn the importance of risk management

Some people go into financial trading with a “get it all at once” mindset. After a few wins, they go all-in with their capital, hoping to make a fortune in one transaction, which eventually results in more losses than expected. 

However, with a demo account, you can go all in all at once if you wish since there won’t be any loss of real funds. This will allow you to build a strategy and explore how risk-management tools work. 

On Deriv, you can create a demo account on our Deriv Trader platform. It’s a great way to explore the available tools and test your strategy before trading with real funds. Check out the multipliers trade type, which includes risk-management tools such as stop loss, take profit, and deal cancellation

Explore how to do in-depth market analysis

There are several financial markets on which you can trade on Deriv — forex, stocks and stock indices, commodities, cryptocurrencies, and derived indices. These markets have different characteristics, given the various elements, such as world events, that could affect them. That’s why it’s crucial to study market movements with the help of market analysis. 

With a demo account, you get the opportunity to analyse how each of these markets work, not only to widen your knowledge about each market but also to understand the outcomes of past trades better.

You’ll also get a good sense of how analysis tools work on live trading platforms without needing to spend any real funds, such as indicators, real-time quotes, charting tools, journals, news feeds, and more. As you practise trading while analysing the market movements more closely, the more likely you’ll be able to make smarter trading decisions.

A great example of an online trading platform with all these features is Deriv MT5, where you can set up a demo account under your preferred account type and start practising how to execute and monitor your trades. 

Develop a plan

An online trading demo account also helps you to understand the importance of planning out your trades. For instance, if you’ve already created or learned some strategies, your demo account allows you to practise and fine-tune them. Doing so will help you figure out which strategy works best for you and evaluate the potential outcomes that you’ll get if you stick with it.

When is the right time to switch to a real account?

 A woman contemplating between a demo and real account.

There is no definite answer to this question, but these signs may help you decide if it’s time to use a real account:

You’ve found a winning strategy.

If over 50% of your positions are winning trades, this may be a sign your strategy is working. Simply put, it means your trading profits are higher than your losses. If you have defined the markets you want to trade on and are confident about your trading strategy, then it’s time to put it to the test in the real-world trading environment.

Your fund management skills have improved.

If you find that you can balance your wins and losses, it just shows that you gained a good understanding of how to manage your funds. Proper fund management will help you prevent further losses. The truth is even the most experienced traders make mistakes with money management, and learning this skill might take you some time, but it is achievable. Once you decide to switch to a real account, ensure you have sufficient funds for a considerable time and manage it properly.

You manage your emotions more effectively.

If you think you are able to trade without giving in to your emotional reactions, you may take it as a good sign to go for a real account. Keeping your emotions in check is highly important, as they can significantly influence your decision-making.

Do not get too worried or panic if some of your trades don’t go well. After the disappointment, take a break and let your emotions settle. Don’t get too excited after a win, either. If you feel like you’re on a winning streak, you may be impulsive and open additional positions. Being able to detach yourself from your trades is a crucial part of becoming a successful trader.

You can start practising your skills now by creating your free Deriv demo account. It’ll only take you a few minutes, and you’ll get access to Deriv’s suite of trading platforms to practise trading risk-free.

You may also like:
Useful tips on how to trade online
Trading for beginners: top 3 tips on how to be a smart trader


The information contained in the Blog is for educational purposes only and is not intended as financial or investment advice.

Deriv MT5’s availability might depend on your country of residency.