If you are curious to know more about Copy Trading, there are a range of Demo accounts which are usually offered free of charge by the major Copy Trading platforms. Demo accounts are useful tools whatever strategy you are considering; whether engaging in Social Trading or Stand Alone. Not only do they allow you to get familiar with the concepts of a particular investment strategy, they also help you get to know which platforms meet your particular needs. It is important, however, to research the differences between Demo and Live accounts at each platform, this will ensure you don’t feel caught out when making the step up to trading for real.
It’s hard to argue against the general rule that where possible you should trade your Demo account as you would your ‘Live’ account. Instruments traded, markets covered, trade size and risk management should all be as accurate a simulation as is practically possible. This is particularly significant in relation to Copy Trading which is a relatively new concept. You should aim to run a realistic portfolio and flush out any anomalies that might exist for your particular style of trading. As the account is not actually being financed it might be harder to test the processes relating to funds being deposited and withdrawn but this is something you would do well to research in other ways. Trading costs such as daily financing charges and bid offer spreads on instruments are something you should be able to get a closer look at, but again it would be worth checking how realistic demo account charges are. Contacting the customer service team to dig a little deeper into some reports will improve your understanding of the report and allow you to grade the support function itself.
There are some other things that might happen when you open a Demo account. One is that completing the application process will likely trigger a follow up call from the Platform. This will ostensibly be a sales call but by opening a Demo you are under no obligation to proceed to a full Live account. Once this is established, it’s worth treating the call as a chance to engage in a bit of Q&A.Having any questions you have to hand when that call comes in means you are in effect having the platform help desk reach out to you. Some Demo accounts ‘expire’ after a certain time which can be frustrating. Even accounts that are being actively traded can be wiped clean so if you’re keeping notes relating to strategies or trading performance then ensuring you have some kind of back up is a good idea.
Demo accounts are relatively easy to set up so you can extend your research across various platforms and analyze their relative pros and cons. As mentioned most of the big players offer them for free so you’d need to question the benefit of paying to hold one and also question the benefit of not trying a free one.