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How a $100K demo account can help you practice new investment strategies


Looking to practice trading without putting your capital at risk?

eToro AUS Capital Limited AFSL 491139. eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. See PDS and TMD.

Disclaimer: General information only. All forms of investments (in particular, trading CFDs, commodities & forex) carry significant risk, including the risk of losing more than the invested amounts, market volatility & liquidity risks. Past performance is no guarantee of future results. Such activities are not suitable for most investors. Seek independent advice and consider the PDS and TMD on the provider's website before making any trades.

Let's pretend you've just scored $100,000.

Now, where it came from doesn't matter – I'll leave you to imagine that for yourself. Maybe you had a bit of a lottery win. Maybe a relative left you an inheritance. Or maybe, you just have some very generous friends!

The catch in this scenario is that you can't just go out and spend up big.

Instead, you have to grow your hypothetical $100K.

So how would you do that?

Would you diversify across ETFs, stocks and crypto? Or maybe you'd prefer to dabble in commodities like gold?

You might even be thinking we are in a bear market with bonds, stocks and crypto all falling in 2022. And guess what? You'd be right.

But that doesn't mean growth is impossible.

In fact, it can be an ideal time to experiment with new trading strategies and to look for ways to diversify your portfolio.

📈Trader tip! A "bear market" is a way of referring to a market that has seen an ongoing downturn. Its opposite – when a market is seeing an ongoing rise – is known as a "bull market".

Neither are formal terms issued by stock exchanges themselves, so be wary of any pundit that's too eager to declare one or the other in the early stages of a market turn.

Real trading techniques – without the risk to your cash

Now, if you've been thinking about giving trading a try, there are a number of trading platforms out there that allow you to practice trading without risking real money.

For example, eToro offers a virtual fund of $100,000 with their demo accounts to help you practice these strategies. You can gain experience as well as familiarise yourself with different assets, markets and risk-management tools.

You're not putting any real money at risk – but you are building your skill set for future trading if you decide to take the plunge.

When you sign up with eToro, the platform provides you with $100K of virtual money to learn the ropes of trading across a wide variety of assets, including stock, forex, commodities and cryptocurrency trading.

"With the Smart Portfolios feature, you're also able to peruse a range of curated investment portfolios that track a specific theme or strategy," says Robert Francis, managing director of eToro Australia. "You can place trades, use stop losses and take profit orders. You're also able to easily diversify your range of asset investments with just a few clicks."

There's no time limit, either.

"You can always revert back to the demo account once you begin your real trading journey," says Francis. "This way, even experienced investors can explore new trading strategies without taking the risk of using their own capital."

Of course, it's always worth investigating a few different trading platforms to see which one suits your needs best.

There is a wide variety available, and all of them have their own unique strengths.

Making the most of the market

So if you're considering giving virtual trading a try, you may well be wondering what sort of trades or investments you should make.

One way you start is by looking at what other traders are purchasing and giving it a try yourself on your demo account. This can serve as a great jumping-on point, while also giving insights into wider market trends.

Francis points to the eToro Q3 investor report as a resource that new traders may find helpful.

"Equities are heavily popular for our retail clients, as per our latest Q3 retail investor survey data," he explains. "We've also seen a huge jump in interest for commodities this year, given their surging prices."

Francis also points to CopyTrader as a key feature of eToro's platform that can benefit burgeoning traders.

It's a feature that provides a great option for those looking to start investing – but don't have the time to research every single investment.

Instead, by following popular investors on the platform, you can simply "copy" their trades.

"Copy trading allows investors to automatically copy successful traders and open the same positions as they do," he says.

However, if you're thinking about taking investing seriously, it's always important to do your own research.

Make sure you investigate your options thoroughly – and never assume that you can solely rely on the wider market.

📈Trader tip! Demo accounts don't have the risk of "real" money – but that doesn't mean they should be treated lightly, either.

"There's no point in making unrealistic trades if you don't intend to implement this into your real trading," says eToro Markets Analyst Josh Gilbert. "Investors should behave as if they were using their own capital."

Getting real-world results

So if you've tested out a few strategies with virtual currency on your demo account and had some success, you might be wondering if this will translate into real-world results.

Well – nothing's certain in investing.

Investing can be an effective way to grow wealth, but it's important to remember that it's high risk.

We'd strongly suggest that you do your research. You can start right here on this site – we've got a variety of step-by-step guides – but we'd always suggest researching as thoroughly and broadly as possible.

But there is one ground rule you must always follow:

Never invest more than you can afford to lose!

Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage come with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.
Name Product Price per trade Inactivity fee Asset Class International
Finder Award
US$10 per month if there’s been no log-in for 12 months
ASX shares, Global shares, US shares, ETFs
$0 brokerage share trading on Aussie, US, Hong Kong and European stocks with trades as low as US$10.
AFSL 491139. Capital at risk. See PDS and TMD
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eToro disclaimer: eToro AUS Capital Limited AFSL 491139. eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. eToro AUS Capital Limited ACN 612 791 803 AFSL 491139. Smart Portfolios are not exchange-traded funds or hedge funds and are not tailored to your specific objectives, financial situations and needs. Your capital is at risk. See PDS and TMD.

Past performance is not an indication of future results. Trading history presented is less than 5 complete years may not suffice as basis for investment decision.

Crypto assets are unregulated & highly speculative. No consumer protection. Capital at risk.

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