Paper trading has evolved from manually writing hypothetical trades on the paper to executing trades with virtual capital on computer systems. The best paper trading apps should be intuitive, responsive, and mirror market conditions. In this article, we will explore the best paper trading apps in Australia and how to develop your trading skills through a demo account.
Best Paper Trading Apps List
Vantage Markets – International Paper Trading App in Australia
Trade Nation – Regulated Paper Trading app with a $0 Minimum Deposit in Australia
The brokerage was founded in 2009 and is regulated by ASIC (Australia), FCA (U.K.), and CIMA (Cayman Islands). As with other multinational brokers, the offerings vary significantly depending on the entity. Vantage Markets on Cayman Island offer approximately 50 more trading instruments than their Australian counterparts; social copy-trading is unavailable at the Australian entity. Before opening an account, traders should check current details.
Reuters economic news are streamed from Vantage Markets MetaTrader suite, which includes Smart Trader add-ons by F.X. Blue LLP. Furthermore, Trading Central’s Pro Trader Tools require a deposit of $1,000 or more. Accounts with $10,000 or more are eligible for Active Trader Rebates, and those with $20,000 or more can take advantage of Pro ECN account benefits.
ZuluTrade, DupliTrade, MyFXBook AutoTrade, and MetaTrader are some platforms that offer copy-trading.
Trade Nation operates as a regulated CFD stock broker. Among the services offered by the popular platform are CFD stock trading, spread-betting, forex trading, and more. Globally, over 1000 financial instruments are available to users.
There are no fees for deposits or withdrawals at Trade Nation, which offers low spreads and zero minimum deposits. Stock traders on a budget will find it a good option.
All CFD trading has a fixed spread of 0.6 pips. Furthermore, Trade Nation offers a free demo account. Demo accounts simulate live trading and can be used to practice using the platform without risking any money.
T.N. Trader is compatible with MT4 and Trade Nation’s native trading platform. Analyzing data on both platforms is possible using a number of indicators. In terms of desktop and mobile platforms, MT4 is the most popular.
Furthermore, Trade Nation provides educational resources and signals to complement stock trading.
Key Features
Traders can be assured of high-security thanks to Trade Nation’s U.K. regulatory status.
Additionally, they offer trading across various asset classes, including Forex, indices, commodities, shares, and cryptocurrencies.
The trading platform at Trade Nation is easy to use for beginners and experienced traders.
With the help of their educational materials and resources, traders can improve their skills and knowledge.
Trade Nation offers customer support to assist traders with inquiries and problems.
Pros
Trading environment that is friendly to beginners
All traders have access to the same account type in eight account base currencies
Quality trading tools on a proprietary trading platform
The selection of assets by international traders must be balanced
With Pepperstone’s trading platforms, you can trade commodities, currencies, indices, cryptocurrencies, and CFDs online. Over 150 countries worldwide are served by the company, which has its headquarters in Melbourne, Australia.
ASIC and FCA regulate Pepperstone in Australia and the U.K., respectively. This company has advanced technology, competitive pricing, and exceptional customer service. As part of the broker’s trading platform, cTrader is specifically designed to trade forex and CFDs.
Professional accounts are also available for experienced traders. Video tutorials, webinars, and trading guides are available through the broker’s educational resources.
Key Features:
Pepperstone has a simple and fast opening process.
Trading with them is cost-effective due to their low spreads and competitive commissions.
There is no minimum deposit required to open an account.
Inactivity fees are not charged for dormant accounts at Pepperstone.
In addition to major currency pairs, traders can trade CFDs on stocks, bonds, and cryptocurrencies.
Pros
A multi-regulatory broker
Reputation for excellence
Trading platforms are available on a variety of platforms
For technical solutions, platforms and tools are great
Low spreads
Competitive trading conditions
Cons
Only CFDs and Forex are available
There is no 24/7 support available
There is a 30-day expiration date on the Demo Account
There are many reasons to consider Plus500. Various currency pairs are available on this popular online platform at a very competitive rate.
This list includes dozens of major, minor, and exotic currencies. The best part is that Plus500 does not charge any commissions for trading forex. As for spreads, the provider uses a dynamic system, although it is usually very competitive during standard market hours.
With spreads of 0.01% on pairs such as EUR/USD, Plus500 is one of the best places to trade. Despite the top-rated nature of this trading platform, it also offers thousands of other markets. The company offers various CFDs on cryptocurrencies and commodities like crude oil, gold, natural gas, and stocks.
Australian, South African, U.S., UK, Germany, France, and many more stock CFD markets are supported. Traders seeking leverage benefit from Plus500’s low fees and various CFD assets. Although Plus500 offers real-time price charts and multiple order types, the platform lacks technical analysis.
Key Features
Plus500 offers a free demo account that users can use to practice trading without risking any real money.
Stop-loss and take-profit orders are available as part of the platform’s risk management tools.
Apps for smartphones and tablets are available from Plus500 for traders to trade on the go.
Financial authorities worldwide regulate Plus500, providing traders with security.
On the platform, traders can find educational resources such as tutorials and trading guides to improve their trading skills.
Pros
Trading without commissions
Markets with thousands of CFDs
The spreads are tight
In-house trading platform, accessible via web browsers and mobile devices
Trader’s sentiment tool, risk management tools, and price alerts are among the many features available
Often, beginner investors think that paper trading poses zero risks; however, the trading habits you develop when paper trading will influence how you trade when you start staking real money.
Set a realistic balance
This is perhaps the most important tip for paper trading. When you execute trades in live market conditions, you can only invest as much as you have. It’s important to pretend like you are investing your real money. You must condition yourself to feel the loss and pain that comes from losing money in real life. Let’s say you have $1,000 saved up for cryptocurrency investments, you probably won’t invest the whole $1,000 at once. If you invest $200 and lose it all in a day, you will sweat and fret. The feelings of fear and greed are only normal when you stake an amount that is important to you. If you set an unrealistic balance like $100,000, you will not feel the pressure that comes with trading in live market conditions.
Most paper trading apps will allow you to set a balance. Other apps also allow you to reduce or increase your virtual balance.
Conduct research and analysis
Research and analysis are the foundation of any sound investor. An investor understands that an asset has intrinsic and extrinsic value; hence, an asset’s market value may not represent an accurate description of what the asset is really worth in the market.
Let’s take an example:
The crypto winter market thoroughly depreciated the value of most cryptocurrencies and tokens. Many of these assets lost as much as 70% of their value. In the early to mid-months of 2022, the crypto winter suffocated Bitcoin, Ethereum, Sand, Mana, and other cryptocurrencies. The market was bearish, and many retail investors tried to offload their crypto holdings as fast as they could. Major players like Elon Musk and Tesla also sold some of their Bitcoin holdings. The drop may not fully represent the value of Bitcoin.
Bitcoin fell to around $19,000 per coin from an all-time high of up to $70,000 in 2021; however, what if Bitcoin’s adoption shows that the crypto may rise to around $30,000 per coin in 2023?
Understanding fundamental analysis will help you see assets as they are and not as the public thinks they are. What is the adoption volume of a particular asset? Is there a new technology that will soar an asset’s demand? How about the historical behavior of the asset? Some assets seem to do well in festive periods like Christmas, and others do not. What legislative decisions are in the works, and how will they affect the performance of an asset?
Will Ethereum’s decision to completely move from a proof-of-work model to a proof-of-stake shoot up its value? When will Ethereum fully adopt the proof-of-stake blockchain model?
How about trading contracts for difference? What data do you need to trade CFDs? You must absorb as many educational materials and helpful resources as possible. Understanding the fundamentals and nuances of CFDs will deter you from making avoidable investment mistakes. If you are investing in shares, what is the company like? What’s the vision, mission statement, financial performance, and leadership quality of the company you want to buy their shares? You also need to determine your trading mission. Some people just want to invest in viable assets for the long-term and monitor the asset a few times a week. Other investors are interested in day trading or short-term trading. Decide how much you are willing to lose and when to stop when you make enough profit.
Whether you trade shares, forex, commodities, options, indices, ETFs, or cryptocurrencies, you must conduct intensive research to understand your preferred instruments. Most importantly, different markets and instruments carry different levels of risks and corresponding ROIs. Precious metals and gold may not carry as much risk as cryptocurrencies due to crypto’s volatility, but they often yield the grandest ROIs. Company shares can be influenced by many market conditions, including the financial performance of the company, adoption of the company tools and services, or scandal, so you should always set your notifications and emails to receive timely news updates.
Test out a variety of strategies
Demo accounts allow new traders to learn how the trading platform works and try their hands on trading strategies. Pro-traders can also use demo accounts to execute trades, make profits or losses, and replicate the trade in similar market conditions if a profit was made.
To make demo trades more realistic, traders must consider slippage. That is, they must take away slippage values from orders that are less likely to be executed in a live market.
Slippage
In real market conditions, orders are not always fulfilled at the price you want. Slippages lead to market orders being fulfilled at expected prices or a part of the position fulfilled at a different price than the market order (in the case of a large order). A demo account does not include slippages.
Many pro investors believe that results from trading a position on a demo account can be speculative; hence, many people make decent profits when trading on a demo account but lose repeated trades in the live market. To prevent such occurrences, you must always calculate slippages and remove it from your trading value after every entry or exit.
Make Assumptions like You are in a Real Market
If you place an order and it is executed a tick or a cent of the low point or high point of the order, you must assume that the system did not execute the order. Of course, the demo will record the order as executed, but you must trade with a live condition mindset. When accounting for slippage, assume that there is a cent slippage when you trade high-volume stocks. Every asset presents a unique slippage value, and you should assume that such slippage affects your profit line.
Create a risk management strategy
With proper risk management strategies, you can make decent profits—and even incredible profits from your trades; you can also minimize your exposure and losses. Trading without risk management will lead to unprecedented losses. While you may not feel the full pang of investment loss when paper trading, you will feel it when you switch to live market conditions.
Risk management is the most important strategy you can execute every time you trade. While often overlooked, many investors have lost months and even years of gathered profit from a single bad trade. In real life, risk management simply means taking an umbrella out just in case it rains.
Choose the right broker
Always choose a broker with low and reasonable commissions and in-depth analytical tools. As an active trader, your charts, technical indicators, and analytical tools should co-exist within a single interface. Going back and forth from one app to another because of educational resources and analytical tools will drain you. Some brokers do not also cater to frequent traders. Their high commission and fees on trade would cut deep into your stake.
Set Your Take-profit (TP) and Stop-loss Points
The TP and SL points are points where a trader is willing to pay or sell. When a trader determines his ROI and uses technical indicators to determine if he can reach the ROI, he executes the trade; otherwise, he doesn’t.
Unsuccessful traders often do not know when to take a profit or loss. They often hold on to a position after a loss, hoping that the instrument’s price will rise again. They also hold a position for too long after a profit, hoping that the instrument’s price will climb and they will earn more money. The trick is to determine your sell points, whether you make a profit or a loss.
An SL—Stop-loss point is the price you will sell an instrument (stock, crypto…) and take your loss. An SL point pushes you to sell when a trade does not favor you. It protects you from holding on for too long. Technical indicators determine an SL point. You should sell if the instrument breaks a key technical indicator, say, a key support level. Don’t hold on wishing the price will come back.
A Take-profit point is a price you must sell your instrument to make a profit. A sharp jump in a commodity price may signal that the market is heading towards a turnaround point. For example, if bitcoin is reaching a key resistance level, it shows that prices of the instrument jumped due to excessive demand and may drop anytime. Holding on to a position and not selling with hopes of continuous price rise is a gamble—and investment isn’t gambling.
Every market exists in a cycle; hence, prices revolve—they neither permanently climb nor permanently drop. Savvy investors understand the need to jump into a market when prices are low (conditions like this can be caused by winters, global economic situations, and other factors) and leave the market when the price of a commodity has reached its resistance level.
Take your time
Take your time to learn the platform and trading strategies for profitable trades. The best traders ask, ‘Why?’ Yes, you opened and closed a position and made a decent profit, why? When you ask the right questions, you can look into the market objectively to determine what changed and learn. Take your time, but don’t spend too much time in the paper trading world—you may soon lose grasp of what is real and what is not.
Pretend that it’s your real money at risk!
Real-life trading often happens in a mist of three emotions: hope, fear, and greed. When you open a position, and the asset’s price moves against you, you lose money. However, since demo account capital is often endless and not real, you may decide to hold the position with hopes of a positive price change. In real life, if the support level shows that an asset’s price will keep on falling, you should sell at a loss. Hope does not push commodities’ prices up.
Fear: People often sell when they should hodl because they are afraid of further price drops. If key support indicators show that a commodity has reached its accumulation phase and can only go up, you should hold. However, many investors will sell because market sentiments are negative.
Greed, on the other hand, makes you hold a position longer than you should when resistance indicators suggest otherwise.
When demo trading, you must condition fear, hope, and greed and train yourself to resist their control over your decision-making process.
FAQs
Is paper trading legal in Australia?
Yes, paper trading is legal in Australia. Always choose a paper trading app that is regulated by the Australian Securities and Investments Commission.
Is paper trading the same as demo trading?
Yes, paper trading is the same thing as demo trading. Before trading apps existed, investors had to write down imaginary trades on paper and calculate profits or losses from positions that they opened and closed.
Can you paper trade crypto?
Absolutely, you can paper trade cryptocurrencies. The crypto you can paper trade are determined by the cryptos the platform supports.
What is the best paper trading platform?
eToro is the best paper trading platform because it is regulated in Australia and offers social trading features. It also offers up to $100k paper trading balance
Kemi is a research writer and editor, and she explores news features on tech topics from blockchain to NFT, architectural rendering, metaverse, cryptocurrency, and home automation. When she isn't reading or writing, she spends time with her family.
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