The Best Free Paper Trading Accounts and Stock Market Simulators

A free paper trading account or stock market simulator is an excellent alternative to a brokerage account and a significant advantage for investors in general, but it's the ultimate benefit for any day trader.

Whether you plan to trade stocks, futures, options, or forex – a ​paper trading account is the perfect tool in building a solid foundation for your successful career.

Many advantages come with paper trading and stock market simulators. There are also some major downsides you should be aware of.

In this Wallet Hacks article, I will reveal the most important facts and list the most interesting demo accounts, free paper trading accounts, and stock market simulators available right now.

Transparency: When you buy certain products from some of the sites we link to, we may earn a small share of the revenue.

Free Paper Trading Accounts

​​First, let's talk about the best free day trading simulator, the best paper trading app, and the best paper trading platform.

​Right now, I have three favorites - Trade Ideas, Webull, and thinkorswim.

Trade Ideas

Trade Ideas belongs to the INC. 5000 and currently rank in position #1930 as one of the fastest-growing companies in the United States. A yearly revenue of $7 million and a 3-Year Growth of 207% shows their products are precisely what traders and investors need.

Their artificial intelligence based stock scanner is one of a kind. At the end of 2019, they released their brand new simulated trading account fully integrated within Trade Ideas A.I.

This is fascinating because you do not need a brokerage account for a real-time test drive in the markets. Yes, there are some brokerage companies that also allow virtual trading, but Trade Ideas goes one step further and enables you to automate your investment strategies. Trade Ideas can be used to scan the markets based on specific criteria, and the platform will automatically execute trades once the criteria are met. On top of that, Trade Ideas lets you backtest trading strategies with just a few mouse clicks.

Day trading without human error, more efficient order processing, and being an all-in-one solution makes this the best free paper trading simulator available right now.

Click here to directly register for free

​Webull

​Webull's investment app is the hottest competitor to Robinhood's app and might be considered the best investment app ​right now. It has an excellent user interface, offers more functionalities, ​and it allows you to trade without any commissions.

Yes, you read it right. Webull is a broker that does not charge any commissions.

Webull Review | Trading App

On top of that, they have included a paper trading account within their app.

The Webull app can be used on your mobile, tablet, or personal computer.

If you open an account with Webull and deposit at least $100 within 24 hours, you will receive a free stock worth up to $1,000! Click here to ​receive your stock now

​thinkorswim

TD Ameritrade provides their customers with the best paper trading platform. It's different from Trade Ideas because you need to open a brokerage account first, that is if you want to use the real-time data feed. If you are located in the United States, it should be a no-brainer when deciding whether to open an account with them or not since the minimum balance needed is $0.

You do not have to fund this account and you can use their trading platform thinkorswim with all of its features.

TD-Ameritrade | thinkorswim paper-trading account

This offer is fantastic for anyone who wants to learn how to trade using a simulator. Another benefit, the platforms and the data feed are entirely free of charge.

Also, ​​Nathan Bear at Weekly Money Multiplier uses TD Ameritrade and shares his monitor in the best options trading course live with subscribers.

​​Effective October 3rd, 2019, TD Ameritrade charges $0.0 in ​commissions for many assets like stocks and ETFs. Options trades are priced with $0.65 per contract with no assignment and no exercise fees. ​That's awesome news!​

Please note, TD Ameritrade is not available all over the world. ​Access to their platform thinkorswim ​is free to use and worth it! If you don't want to open an account with them, you can also register for and practice virtual trading with a delayed data feed.

What Is a Paper Trading Account?

​Now, let's answer the question to "What is paper trading?" ​Paper trading is a risk-free approach to buying and selling your favorite stocks, options, and futures. The times of boring watchlists have long gone. Nowadays, powerful real time paper trading tools enable you to trade the markets as you would in a real account.

A good ​paper trading account provides you with the same functionalities and features as a real trading account. But there is one crucial difference.

You are day trading with virtual money instead of real money. Trading virtual money with a stock market simulator allows you to gain trading experience without risking your capital. You can paper trade stocks and some paper trading software tools allow paper trading options.

​Must Have Functionalities of Any ​Paper Trading Account

  • ​​Charts: ​Visual confirmation is a must for any day trader and swing trader.
  • Datafeed: ​Real-time, or at least near time, prices are helpful to simulate real market conditions as best as possible.
  • ​Trade Reports: ​Important for documentation and the learning process. No trade reports, no good learning curve.
  • ​Watchlist functionalities: ​List your most interesting stocks, options, and forex pairs in one table and compare them based on different columns like price, gain, change, gap, or volume.
  • ​Low cost: ​Not really a functionality but a general rule of thumb
  • ​Optional: Backtesting capabilities: ​Actually, most demo accounts do not have this feature, but tools like NinjaTrader and Trade Ideas do. Backtesting strategies give you an immediate overview of the efficiency of a past strategy. This can help with evaluating the right strategy.

​Important Differences between a Real Trading Account and Paper Trading

Your account will be funded with virtual money only. As with computer games, a virtual ​paper trading account has a major pitfall: computer games allow you to restart your game whenever you want.

​Paper trading accounts provide a similar functionality and in most cases you can reset your account balance as often as you wish.

Real life is different. If you lose money in real trading that means someone else has it.

In real trading, you cannot hit a magic button allowing you to reset your account. Instead, you have to put more funds into the account.

Here are the most important differences between a real trading account and a demo account:

​Fact

​Paper Trading Account

​Real Trading Account

​Email-Address needed

x

x

​Deposit needed

​typically not

x

​Tax-relevant

-

x

​Balance reset possible

x

-

​Trading history

​partly*

x

​Full functionalities

-

x

​Fees for Datafeeds

x (real time)

x

​*​until the reset of your demo account or end of the demo account period.

Hint: A funded trading account like ​this one with a free trail ​is the combination of a paper trading account and a real trading account. Various funded trader programs offer people to trade an account of another company while keeping up to 80% of the profits.

​How to Know What and When to Trade?

Trading strategies are one of the biggest hurdles for new traders. Where to start? What pattern to trade? When to buy and when to sell a stock?

Stock screeners like Trade Ideas Pro A.I. help you to have the right trade idea at the right time. Take a look at the trade ideas review to learn why Trade Ideas Pro A.I. is the perfect tool for any day trader and investor.

​Advantages and Disadvantages in Using Paper Trading

4 Paper Trading Advantages

​Perfect for Self-Learning

​A ​paper trading account can give you a more realistic view of the financial markets than any trading course can. ​You will understand the market structure and price action.

Risk-Free Trading

​Buying and selling stocks, options, forex, or even cryptocurrencies is dangerous for your pocket if you don't know what you are doing. A ​stock market simulator protects you from any risk or losses.

​Risk-Free Trading Strategy Exploration

Making money in the financial markets is not an unconscious action. You need a good trading strategy in order to make money. Most beginners are undecided about which way to go and often jump from one strategy to another.

With paper trading, strategies and trade ideas can be explored and tested without risks.

Platform handling experience: You will learn the process of how trading works and become a master in handling the trading platform. This is a solid foundation for your trading career.

Using a trading platform from your online broker will provide advanced knowledge which will help you learn how to execute, buy, and sell orders right from the order screen within the platform.

Once your ​paper trading account becomes a real trading account, this will be a huge benefit.

​Mental Attitude

Losses are part of the game. Your trading strategy and preparedness could be as effective and perfect as possible, but there will be days when you have a bad performance and you feel everything went wrong.

During the learning phase, the demo account will prepare you to handle such losses. With the right strategy, you will gain more self-confidence when recovering from losses. Have a plan, stick to your plan, and trade with your plan.

​3 Paper Trading Disadvantages

Not 100% Realistic Order Executions

The buy and sell orders you generate are not transmitted to the financial markets. Therefore, your orders do not have any impact on order executions and market liquidity.

In real life, your orders will have an impact, and the order execution could be different. Usually, your ​paper trading account executions are declared more favorable than they would be in real trading accounts.

​Fee Structure Not Transparent

Trading in real life will trigger fees that have to be paid to your broker, the stock exchange, the bank, and more.

Your ​market simulator will never be 100% transparent and correct in terms of your total fees. Always expect that your fees will be higher once you trade for real.

​​Paper Trading Is Not 100% Free

The closer a paper trading account comes to realistic trading environments, the more expensive the demo account becomes. If you want to use real-time data, you have to pay for it.

If you need a brokerage API for testing purposes, most vendors will charge a fee.

Completely "free" accessible demo accounts are full of advertisements to refinance the cost of the vendor or have only low-level functionalities and data.

It's an old saying but also a true one, "you get what you pay for."

​What Will Happen Once You Switch from Your ​Paper Trading Account to a Real Trading Account?

A general rule of thumb: If you don't make money in your risk-free trading account, you will never do so in a real account.

Once you make your way to a real trading account, you will be faced with even more challenges, making it harder to make money.

You know me. I always give you a clear and honest picture of trading and investing.

Day trading is not easy, and you have to know what you are doing.

Here are some of the challenges you will face when trading real money in your brokerage platform:

No Reset, Less Money

​Many accounts come with a virtual amount of $100,000. The average amount of a real brokerage account is much lower. As a result, you will have less buying power.

When beginning, use the demo account settings to adjust the virtual money value as close as possible to your upcoming live trading value. And please be aware that you cannot reset your real money trading account with one mouse click. Only an additional deposit will give you extra funds.

Spreads Can Be Huge

A spread is the difference between Bid and Ask in the order book. Trading stocks or financial instruments with high spreads is not a good idea.

Within the ​paper trading account, you might get your order filled at a very unrealistic price level. In real life, you might not get an execution due to some order book magic. However, this part is complex, and I will dedicate a separate blog post to this topic.

​Liquidity Can Limit Success

Within most ​free paper trading accounts, your buy and sell orders will be executed 100%, whether you order 1,000 stocks or 10,000. Market liquidity will be ignored in most ​simulated accounts.

Trading with real money will put you in a position in which your order will be filled only partially. Imagine you trade a stock that has an average trading volume of 20,000 stocks per day. You alone could generate a buy order of 10,000 stocks at the market open. Ouch!

Deal Rejection

​​

​Trading stocks, options, and futures as a primary instrument will put you in a comfortable situation so that in most cases a deal rejection would not come true.

If you consider CFDs for stocks, forex, or even binary options, then you will be faced with the deal rejection issue. Simply put, if the broker has a feeling you could get a price where he would lose money, then he will reject your order.

This happens because CFDs are not an original financial instrument and brokers want to protect themselves as much as possible. The best way to avoid such things is simple. Do not trade CFDs and other exotic financial instruments.

Additional Costs

Interests, dividends, cash transactions, deposits, withdrawals, and many other services can cost additional money.

It depends on your broker what additional costs could arise. Make sure to check the terms before you open a brokerage account.

Order Execution

​You will experience less favorable order executions during real trading than you would during the demo account. The real market is harder than trading with virtual money. Using the right order types will protect you from uncalculated losses.

​Review List

​Final Thoughts on the Best ​Free Paper Trading Accounts

Day trading requires knowledge and a ton of practice. A demo account is a perfect choice for any beginner. Even experienced traders are sensible enough to use a demo account for evaluating new trading strategies.

As I mentioned above, using real-life to learn day trading, buying and selling stocks, options, futures, and other financial instruments will be extremely challenging.

​​The ​paper trading account gives you the ability to gain experience in handling your trading platform, and it's a great chance to practice the know-how you acquired while attending a trading course.

​​Wise preparation, including continuous development and improvement of skills, is essential for long term success.

​Once you are ready to trade with real money, you will be well prepared with the right trading strategies and loads of self-confidence.

This is the perfect foundation for long term success when trading the financial markets with actual capital.

It doesn't really matter whether you start with a demo account from an online broker or use a standalone trading tool.

The most important thing is that you practice paper trading within a demo account or with a stock market simulator.

Plus, a stock screener like Trade Ideas helps ​you keep track of the financial markets right from the start and specifically search for stocks that meet your chosen strategy and selection criteria.

​About the Author

​Alexander is an investor, trader, and founder of daytradingz.com. After devoting many years to educating himself on powerful day trading techniques and effective investment styles, he started trading and investing more actively. In the past 20 years, he has executed thousands of trades. In 2015, he began writing articles about trading, investing, and personal finance. He is very passionate about sharing his knowledge and strives for success in himself and others. Alexander has been featured on Benzinga, Rockstar Finance, and ESI Money.