Simulated trading also known as demo or paper trading is a method of experiencing the trading procedure without risking actual money. The process is carried out on a market simulator program which mimics actual market forces and order executions. Some times these programs are the actual trading programs that only mimics the order placing and execution process.
Now simulated trading is available for almost all types of financial instruments including stocks, market indices, forex currencies, Exchange Traded Funds (ETFs), Contract of Differences (CFDs), options, futures commodities, mutual funds, and more. Apart from just avoiding the risks involved in trading, these demo trading systems help traders in many ways to improve their trading skill. Below are some benefits of simulated trading systems.
