By: Alexander Voigt
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5 Free Paper Trading Accounts and Stock Market Simulators

Paper trading accounts help day trading beginners to evaluate, develop and test trading strategies. They provide a risk-free way of practicing trading. Here are our top picks.

A free paper trading account 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 – the best paper trading apps are the perfect tools for building a solid foundation for your successful career.

Many advantages come with paper trading and stock market simulators. However, there are also some major downsides you should be aware of. In this article, I will reveal the most important facts and list the most exciting demo accounts, free paper trading apps, and stock market simulators available right now.

free paper trading accounts

Best Paper Trading Accounts

  • Trade Ideas – Best Paper Trading App for Day Traders
  • TradingView – Best Free Paper Trading Platform for Investors
  • Topstep – Best Paper Trading Platform with Funded Trading
  • Generic Trade – Best Free Paper Trading Account for Trading Futures
  • Generic Trade – Best Tool to Analyze Paper Trades

1. Trade Ideas

Trade Ideas

Trade Ideas is located in California and was founded in 2003 and offers the best free day trading simulator, the best paper trading app, and the best paper trading platform. Based on Inc. 5000, Trade Ideas belongs to the fastest-growing companies in the United States. A 3-Year Growth of 124% shows that their products are precisely what beginners, advanced traders and investors need.

Their artificial intelligence based stock scanner is one of a kind. And their free simulated trading account is fully integrated within Trade Ideas A.I. Besides the simulator, there is also a brokerage API to connect with Interactive Brokers (direct access broker) and E-Trade (commission-free trading) accounts for automated trading.

This is fascinating because you do not need a brokerage account for a real-time test drive in the markets. Yes, some brokerage companies also allow virtual trading, but Trade Ideas goes one step further and enables users to automate trading ideas.

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 make this the best free paper trading simulator available right now.

While the paper trading functionality is freely available, a Trade Ideas subscription is needed to use the paper trading module. Nevertheless, the offer is a good choice for active day traders looking for an excellent stock screener in combination with risk-free trading by using the simulator.

2 Weeks Trade Ideas for $7.77 + Win $2,400 Amazon Gift Card

2. TradingView

TradingView

TradingView offers a great simulated trading account that can be used for paper trading activities to practice investing and trading securities. The benefit of the paper trading module is that users can essentially trade in the same way as they would with real money. But instead of risking real money, they only risk paper money while learning how to trade.

The TradingView system tracks all buy and sell orders, profit and loss, and order details. The account balance is pre-configured with $100,00, and users can reset the balance at any given time and start with any paper trading app value they like to define.

A good paper trading app feature that TradingView offers is chart trading. You can trade from any chart by hitting the buy and sell buttons which show the bid, ask and even the spread.

The order panel at the bottom of a chart lists the orders and current positions. Once a trade is opened, you can close or reverse a position right from the chart. Simulated paper trading is available with all TradingView accounts.

30 Day Free Trial + Discount Offer During Trial Period

3. Topstep

Topstep

If you are looking for a free paper trading account, you already made the right decision to practice your trading and investment activities before getting into it with real money. That’s great, and your chances of long-term profitability and success rise by going this path. A simulator helps you to make your first steps without risk. It helps you to test new trading strategies and to build confidence.

Topstep focuses on futures trading simulation. This alone makes Topstep unique in this list since most brokers and tools focus on stock market simulators and ETF-paper investing.

But there is one thing that lets Topstep really stands out from all the other solutions mentioned. Topstep funds you a real-money trading account if you make it through their Trading Combine, and you can withdraw the majority of profits you make. The Trading Combine is all about trading based on a clear set of rules, so basically, it’s precisely the purpose of trading on paper, learn, trade, adopt.

Futures trading is different from investing in stocks. That’s why Topstep also educates its students with videos, podcasts and blog posts. 97% of their funded traders say that Topstep improved their trading, and customers rate them 4.4/5 on Trustpilot.

A small monthly membership fee applies, but in exchange, traders have a chance to get a fully funded account once they successfully make it through the Trading Combine paper trading challenge. In addition, traders can then withdraw 80% of profits made with the funded account to the bank account. With Topstep, on average 600 accounts get funded per month, and their traders have withdrawn about $8 million US-Dollars since 2020.

70% Off On All Account Sizes

4. Generic Trade

Generic Trade

Generic Trade is a futures broker that has served traders since 2010 with cutting-edge trading technology and low futures trading commissions of $0.59 for every account size.

Generic Trader Online, Generic Trader Professional and a dedicated mobile trading app are available for two weeks of risk-free simulated trading. A live account is not needed to use the feature.

During the free trial, traders can use the $50,000 virtual trading account on PC, Mac, PC, iOS and Android with all features such as:

  • Real-time streaming quotes and charts during market hours
  • Futures contract specifications, research and handbooks
  • The Trading Matrix, live news, time & sales
  • Real-time account history and details
  • Advanced analytics and studies and more
Visit generictrade.com

5. TraderSync

TraderSync

TraderSync is a trading journal app that enables you to import trades made with a paper trading platform for in-depth trade analysis. You have two main options to use this tool.

The first is that you use the market replay feature to execute trades based on historical data points. Those trades are then automatically logged within TraderSync and ready for reporting. Your paper trades are then visible with buy and sell markers within charts and with detailed trade analysis.

Alternatively, you can either connect TraderSync with your paper trading app or download the trade data from your platform (e.g. Interactive Brokers, Robinhood, etc.) and then import it to TraderSync for further trade analysis.

7 Days Free Trial

Best Paper Trading App Summary

Trade Ideas offers the best fully-integrated paper trading app (with automated trading, AI features, market scanners, etc.) and Topstep provides an innovative way to get involved with futures trading without risk.

Guide

What Is a Paper Trading Account?

Now, let’s answer the question of “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 real money. 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 paper 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 platforms 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 70% off 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.

What Accounts Should I Use for Day Trading?

Day trading platforms are designed for fast trade executions, flexible order routing scenarios and hotkey trading. They are all downloadable platforms for installation on a personal computer. Popular day trading platforms are Cobra TraderPro, DAS Trader Pro, and Sterling Trader Pro.

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.

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 Strategy Exploration

Making money in the financial markets is not an unconscious action. You need a good 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 with virtual trading, use the demo account settings to adjust the paper currency 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 platforms, 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.

Final Thoughts on the Best Free Paper Trading Accounts

Day trading requires knowledge and a lot of practice trading. A demo account is a perfect choice for any beginner. Even experienced traders are sensible enough to use a demo account for evaluating new profitable strategies. Some of the best trading platforms have free paper trading functionalities.

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 trading 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 searching and trading stocks that meet your chosen strategy and selection criteria.

FAQ

Are paper trading accounts free?

Yes, with delayed data. This can be end-of-day data or delayed intraday data, for example, with 20 minutes delay. The best paper trading apps are those with real-time data. Real-time data comes from the stock exchanges and users have to pay for it, even if the the platform by itself can be free sometimes.

What are the benefits of a paper trading account?

The main benefit of a paper trading account is that investors and traders can practice investing and trading without risk. In addition, a paper trading account is perfect for learning how to handle the trading platform, transmit orders and test trading strategies.

Alexander Voigt, CEO
Article by
Alexander Voigt is the founder of DayTradingZ, was a regular contributor to Benzinga and has been featured and quoted on leading financial websites such as Investors.com, Capital.com, Business Insider and Forbes.