Spread Betting Demo Account
If you decide you would like to try out spread betting then before setting up an account it is recommended you first open financial spread betting a demo account. The system (or 'trading platform') used for demo accounts are just like the real thing and the computer screen in front of you will look much the same as if you were playing with real money. The only difference of course is that you are playing with fantasy money. When you open one of these virtual accounts your account will automatically be deposited with some virtual cash - usually around £10,000 - which you can use to practice laying bets.
Why use a fantasy spread betting demo account?
- It's free!
- You can develop and test various strategies and see if they will make you rich or poor
- You can compare the trading platforms of different companies
- You can check out how the platform works with your browser and computer operating system
- You can make all your mistakes with fake money
- You can use your fantasy spread betting account to check out the spreads they are offering (some companies offer more competitive spreads than others)
The most important of these reasons in the long term is testing your trading strategies. Before you start actually putting your own money at risk it's worth playing fantasy spread betting to see if you can make money at it. It's a good idea opening a few accounts with different providers and running a different system with each. Then you can compare which system is the most successful. Once you've opened your full account it's worth keeping your demo accounts active so you can keep trying out ideas without committing money.
The limitations of virtual spread betting fantasy accounts
It's as well to be aware of some of the limitations you will find in a spread betting simulator (demo) account as compared to a real account:
Delayed prices
Most spread betting demo accounts will offer you prices delayed by 15 minutes. Real time prices are a precious commodity in share trading and companies don't like to give them away free. For most punters that's not a problem but if you need real time prices for minute by minute trading then this is a drawback.
Time limited
Some companies restrict the time you can keep a demo account open, so that it expires after a few weeks. This would be a problem if your strategy involved holding a bet for a number of days or weeks, which is the way most people tend to trade.
Limited access to markets
You may find that your demo account limits you to a restricted number of the more popular markets and shares. This may be enough for some but if you are thinking about trading on some of the more exotic markets then this may be of limited value to you. You also wouldn't be prepared to see what the typical spreads are in these markets.
Full registration required
For some demo accounts the ability to practice for free is part of the full account, so in order to access it you would need to go through the application procedure with all the paperwork that entails. There's not much point to this kind of demo when you just want to try out a company first. On the other hand it can be quite a useful facility to be able to try out practice bets from your full account.
It's not real money
No matter how hard you try and how disciplined you are when using a trial account, there is nothing quite like risking your own cash to make you focus on making serious profits. And of course if your system is successful and you make a lot of winnings it can be really disappointing that it is only pretend money.
Choosing a financial spread bet demo account
About half the companies that provide financial spread betting offer a demo account. Choose a company you are interested in and check out their website. Demo accounts are variously called practice accounts, virtual accounts and spread betting simulators. To help you choose a spread betting company that is right for you here are a few tips to help you know what to look out for:
- Make sure they are regulated by the FSA.
- Find out their minimum deposit, which can vary from about £100 to £20,000.
- Find out the minimum £s per point, which can vary from 1p to £10 (but remember - some shares can
- easily move many hundreds of points in a day).
- Check out the shares, markets and commodities you have access to.
If it appeals to you, find accounts that will let you deal with more complex things such as CFDs, options and futures. - Find out if they offer cash inducements. Some companies offer as much as £100 when you sign up (yes it's true and it is real money, but you can't just spend it, you have to trade with it).
- Check out the support offered (e.g. do they offer free training materials and seminars? many will offer these to new clients).