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Spread Betting Demo Accounts

Oct - 23 - 2012
Business Tips


Placing your very first spread bet can be daunting, particularly if you are new to financial markets. Spread betting demo accounts allow you to trade virtual money for free, in order to gain sufficient experience for you to decide to trade live. A typical starting balance would be £2,500, but some go as high as £10,000.

Demo accounts carry no further obligations. Accounts expire after a certain period, which is usually 30 days. Almost all spread betting companies offer demo accounts, including Cantor Index, City Index, IG Index, Capital Spreads, Spread Co, Saxo Bank, Finspreads, InterTrader, Financialspreads.com, Gekko Global Markets, FXCM and Selftrade.

Demo accounts allow you to develop and evaluate trading strategies at no risk. You can become familiar with terminology, trading strategies, the mechanics of making and closing trades, monitoring positions and executing stop loss orders, OCOs and limit orders. It is also possible to employ the free tools offered by the spread betting company such as Bollinger bands and candlestick data, which are how most traders predict market movements.

The requirements to sign up for a demo account are looser than for a live account. Generally, only your name, address and contact details are necessary. No financial information must be disclosed. Reputable spread betting companies will not share your information with third parties. It is best to use a demo account which requires no initial deposit. Demo accounts can be reset any number of times.

Because demo accounts use “play money,” it has been said that they have no accountability and are emotionless, so you are more likely to do things you would never do with your own money. Losing £10 of real money is more heartrending than losing £10,000 of virtual cash. Often, market data is delayed to encourage you to sign up for the live version, which eliminates much of the subtleties of news trading. An alternative is to trade for real in minuscule amounts; however people might prefer to live with the limitations of demos to trade more realistic sums and lose no real money at all. Some providers run competitions where prizes are given to the people who make the most returns, for instance the Paddy Power Trader Demo Competition.

Spread betting requires a comprehensive learning phase, so a demo account is the perfect place to begin. In this way, you can avoid effecting one of the 80 percent of trades that loses money.

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