Paper trading gives you a safety net. If you’re new to stock trading, getting started can feel like walking a tightrope. When we first started, paper trading helped us navigate the world of market exchanges and allowed us to find our feet.
Our review of the best paper trading brokerage accounts of 2021 lists our favorite platforms. We also break down what paper trading is, and the pros and cons of using one.
Best Paper Trading Brokers 2021
Here is a list of our favorite trading platforms that offer paper trading. For this list, we considered a few issues. These include how similar the paper trading apps are to live trading, the educational content, and how user-friendly it is.
This is our selection of practice trading accounts…
- IQ Option
- TD Ameritrade (thinkorswim)
- WeBull Paper Trading
- Interactive Brokers
- Bear Bull Traders
- Warrior Trading
- Ninja Trader
eToro was founded in 2007. It is a highly regulated trading exchange. It is a safe option for trading forex and CFDs.
eToro is a great option for social copy trading and cryptocurrency. They have a great user-friendly web-based platform and mobile app.
eToro is ideal for beginners and casual investors.
Free ETF and stock trading
A fee charged for inactive accounts
Easy account opening
Only one account base currency
A vast amount of educational content
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
Plus500 (non US)
Plus500 is a UK-based trading exchange that was founded in 2008. Similar to eToro, Plus500 is a heavily regulated trading platform.
Plus500 is an easy-to-use platform. They have a simple, user-friendly mobile app that is ideal for traders on the go. Plus500 has a simple process for opening accounts and their customer support is amazing.
A downside of this platform is that it has a limited product portfolio. Plus500 only offers CFD products.
Limited product range
Amazing customer service
Unimpressive research tools
Quick and easy account opening process
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.4% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
IQ Option (non US)
IQ Option is owned and managed by IQ Options Europe Ltd and they are based in Cyprus. This is another highly regulated and secure trading platform.
What makes IQ Option stand out among the crowd is that they offer users a proprietary platform instead of the standard trading platform. The proprietary platform is great because it is designed to cater to users’ trading needs.
This platform is also used for binary options trading and CFDs. IQ Option’s trading platform is user-friendly and offers tools like charting and margin trading.
A downside of this platform is that it is not available in the US so this is something to keep in mind if you’re a United States citizen.
Not available worldwide
Quick and easy account opening
A low minimum deposit needed
e*Trade is a grandfather platform that has stood the test of time. They have a reputation for having an easy-to-use platform with remarkable customer service.
What makes e*Trade great is that they no longer charge commissions on online stock, options trade, and ETFs.
They offer both a web-based platform and a mobile app. For paper trading, e*Trade starts with a $100,000 trading equity which is more than enough to play around with.
No commission fees charged
Focused on active traders
Easy-to-use trading platform
Low minimum deposits
TD Ameritrade (thinkorswim)
TD Ameritrade is known as being a platform that offers a rich selection of trading features. They offer tons of charting and scanning tools.
This is ideal for active, serious traders.
TD Ameritrade has a web-based and mobile platform. Their mobile app, called thinkorswim, is easy-to-use and has excellent tech support.
Like most paper trading apps, thinkorswim offers a simulation account at $100,000. This is over enough virtual currency to have some fun and learn.
Commission-free stock, options trading, and ETF
Does not offer fractional shares
Amazing trading platform
Great customer support
Webull was founded in 2017 and is relatively new to the stock exchange world. This platform is a good choice if you’re an advanced trader because Webull offers extensive trading features.
Webull offers in-depth charting and numerous technical indicators.
Their platform is user-friendly and customizable which makes it a good option for newbie traders.
Webull’s trading app has free paper trading services that are easy-to-use and access. What is great is that they offer $1 million to start trading which is more than enough to get a feel of the trading exchange.
A vast amount of trading tools
Do not offer mutual funds
Offer cryptocurrency trading
Barebones educational content
TradeStation was founded in 1982 and is a US-based stockbroker. Like the other trading platforms on this list, TradeStation is a highly regulated broker. They are a tried and trusted brand with a long track record.
TradeStation offers a desktop and mobile platform with amazing features like advanced orders and a variety of asset types.
What makes TradeStation great is that their paper accounts have access to the historical market databases. This can help you develop and test trading strategies.
Low fees for stock and ETF
Amazing educational tools and content
Do not offer forex trading
Bad customer service
Nvstr was founded in 2015. Their platforms are available online and on Android and iOS mobile devices. The interface is unique and reminded us of the mobile Facebook interface.
Nvstr lets you manage your profile and has a feature that suggests ETFs or stocks that you could buy or sell to keep your profile balanced.
Nvstr offers a paper trading account that you can use to experience their platform without the risk of losing your money.
20 free trades each month
Charge $4 monthly subscription fee
Zero account minimum fees
Do not offer fractional investing
Interactive Brokers is a global trading platform. They offer web, desktop, and mobile platforms which gives you the freedom to choose one that suits your lifestyle.
Interactive Brokers also offers a proprietary IB SmartRouting system that can provide a share price of around $0.47 per 100 shares which is an improvement on industry standards.
For their paper trading accounts, Interactive Brokers offers equity of $1 million which is great.
A range of asset classes offered
Inactive accounts can generate substantial fees
Smart order router
Streaming data only runs on a single device at a time
The mutual fund replicator is less expensive than ETFs
Bear Bull Traders Simulator
Bear Bull is a brokerage platform that focuses on day trading education. A key part of this is the real-time simulation offered on the DAS Trader Pro platform.
Bear Bulls offers training and support for beginners. Their interface is also simple and user-friendly. They have included hotkeys and configured their layouts for a quick and easy jumpstart.
The platform has numerous resources that can help you customize your setup to suit your needs and wants.
When you’re ready to go live, you can continue using the DAS Trader Pro platform. This makes for a seamless transition from paper trading to live trading.
Affordable subscription plans
Monthly subscribers are not given access to educational webinars and psychology training
Amazing educational content and support
Helpful trading community
Offers daily watchlists and scanner live streams
Warrior trading is a great platform for both newbies and advanced traders. They are accredited by the Better Business Bureau where they received an impressive A+ rating.
Like Bear Bull Trading, Warrior trading offers extensive educational content such as courses, resources, and active community support.
Warrior trading’s paper trading platform is a result of direct collaboration with NYSE and NASDAQ. This gives you access to level 2 quotes.
Their paper trading platform is designed to be as close to live trading as possible. This includes working in real-time conditions.
When starting your paper trading account, Warrior trading offers you $200,000 of virtual currency which is more than enough to help you find your feet.
An amazing array of educational content
Do not focus on long-term trend trading strategies
Offers structured trading methods
Educational content is expensive when compared to the free options available
NinjaTrader Free Trading Simulator
NinjaTrader was launched in 2003. They run as a fee-based system which is common for broker platforms.
What makes NinjaTrader great is that their paper trading platform is free for all users.
The paper trading platform focuses heavily on education. The platform sports all the features of its live trading platform.
Their research and stock charting tools are interactive. This lets you pinpoint locations on a stock chart that you want to execute trades on from the same screen.
What makes NinjaTrade’s paper trading platform great is that the charting also offers backtesting which lets you trade during various periods.
Amazing tools for analysis
Only offers trade derivatives like futures and options trading
Free to download and use paper trading platform
Good educational content
Paper Trading Explained
Paper trading uses demo or practice accounts to let you trade options, futures, or stocks with virtual money (not to be confused with digital currency). By making use of paper trading (also known as virtual trading), you can familiarize yourself with the platform's exchange without having to risk real money.
Virtual trading aims to let new users or beginners practice different kinds of asset trading without putting themselves at risk. If you’re an experienced trader looking to diversify your portfolio, paper trading can help you get a feel for different asset exchanges.
Virtual Trading vs Live Trading
Virtual trading or a stock market simulator gives you a sense of security when practicing trades or getting to know a new platform. Paper trading apps use real-time information to test the success or failure of your practice trades.
This lets you test out trading strategies and building portfolios.
Most trading platforms offer paper trading that looks and feels just like the real thing.
The only difference is that with live trading, you are putting your own money or assets at risk with the hope of making a profit. With paper trading, there is none of the risk or reward because it is a simulation account.
Live trading accounts do not offer the safe security paper trading accounts offer, and this can affect your strategy so this is something to keep in mind.
In simple terms, think of paper trading as test driving a new car and live trading as buying a new car.
Account Routing and Fills ETC.
When an order is put in for trade it goes to the exchange where it is matched with another trader and the trade is carried out. If you are selling stock you will need to be matched with someone interested in the same stock.
The process of moving an order to the exchange is known as routing.
Routing doesn’t happen with paper trading because it’s not a real trade. With live trading, issues can happen when routing your order. Machines could crash and prevent your order from getting where it needs to be.
In live trading, routing issues like system crashes can occur but it is rare. This is important to keep in mind when doing paper trades.
The experiences you have when paper trading might not be the same as when live trading so keep this in mind.
Emotions and Psychology
Paper trading lets you practice trading without having to worry about losing money. This security might cause you to trade more freely than you would once you start live trading.
You should keep in mind that paper trading does not account for your emotional investment in your stocks or how losses could affect you mentally.
Trading with a live account might be a different experience for you than paper trading because you stand the risk of losing money. This can affect your trading strategy and the kind of risks you are prepared to take.
Paper trading, while a valuable educational tool, has some limitations. Here are the key limitations to paper trading.
- Commissions and Slippage: Depending on the platform you choose, live trading can come with all kinds of hidden commissions and slippages. This can be increased by poorly captured and presented wide spreads that paper trading offers. A stock that might cost $20 in paper trades could be $20.50 in real trades.
- Formfitting: Paper traders handpick perfect entries and exits, often bypassing all the obstacles you might face in the real-life computer-driven environment. These obstacles become all too clear in real trading when traders risk seeing sound positions evaporate because an algorithm has shifted.
- Market Correlation: Another limitation of paper trading is that it does not account for the broad market’s impact on individual securities. So, while the results of trade could look terrible or amazing in theory, the conditions that created the results of the trade might have nothing to do with your position. These conditions could be because of the larger market activities.
Pros and Cons of Paper Trading
Much like live trading, paper trading comes with its own set of pros and cons.
- Amazing learning tool: Paper trading is a great educational resource that you can use to learn about trading. It prepares you for real trades and acts as a simulator for live trading. This is great if you’re a beginner and want to get a feel for trading without risking your funds.
- Zero risks: With paper trading, you can experience trading, buying, and selling securities using a trading platform of your choice without risking your own money. Paper trading lets you test out new trading strategies against real-time data without running the risk of making a loss. You can test limitations, and different instruments whether they are worth it or not.
- Take your time: With paper trading, there is no rush. You can take as much time and effort you need researching market trends and trade strategies. To make the most of this tool, you should act as though the trades are real. Make decisions as though it could result in a loss. This will help you get into the right mindset when you start live trading.
- No profits or gains: The major benefit of paper trading is that you cannot lose money. On the flip side, the major downside of paper trading is that you can’t make any gains or profit. Because paper trading is a simulation, none of the trades you make occur so keep this in mind. At its essence, paper trading is a learning tool.
- Cannot accurately provide a real-life experience: This is a key limitation to paper trading. While most platforms try to have their paper trading apps be as closely related to live trades, there are some things it does not account for. It does not give you a clear view of commissions and fees. When shifting from paper trading to live trades you might discover some hidden fees. This is something to keep in mind. Our advice is to make sure you do your research.
Paper Trading Games
If you’re not sold on the idea of paper trading or just want something light-hearted and fun, you might consider paper trading games. You can play these games with friends or other gamers online. This lets you compete, play, and learn, all at the same time.
There are three popular paper trading games.
Wealthbase is a new mobile trading game. This game lets you set up a private trading game for you and some friends. A benefit of this game is that it lets you try paper trading currencies as well. This lets you try out riskier trades and investments.
We like this game because it acts as an intro to paper trading and it is a great place to start.
MarketWatch’s Virtual Stock Exchange
MarketWatch’s virtual stock exchange is a popular trading game. Much like paper trading, this game lets you place pretend trades in real-time and with real market conditions.
MarketWatch is not limited to stocks alone. With this game, you can practice trading options and other instruments. For those with a competitive streak, MarketWatch also has a leaderboard so you can see how you compare with other players.
Investopedia’s Stock Simulator
When starting, Investopedia ‘gives you’ $100,000 that you can use to invest in stocks and options trading.
While not as extensive as MarketWatch, Investopedia’s Stock Simulator does offer tutorials and a ton of educational content. They also offer extensive educational research.
This game, much like paper trading, is focused on education and is ideal for beginners.
How to Pick a Virtual Trading Account
Here are some things to consider when picking a paper trading account:
Similar to real accounts
How similar is the paper trading account to the live trading account offered? Do they share similar features?
These are questions you should ask yourself when picking out a virtual trading platform. Ideally, you would want the paper trading account to be as similar to a real account as possible.
This will help you familiarize yourself with the platform and make the transition from paper account to live account smoother.
Something to consider is whether the paper trading platform offers real-time data. Having this available helps develop trading strategies.
It also helps you decide what to trade and when. Having real-time data available is invaluable, especially for beginners who are learning.
You should also check whether the platform offers securities. While this is not as important if you’re going to be using a paper trading account, this is important if you decide to go live.
Ideally, you should choose a paper trading platform with a broker that you would want to use for live trading. This way you can familiarize yourself with the platform you want to use.
It is also important to check out the features, fees, and securities of the live account and make sure it suits your needs.
Research and tools available
The research and tools available on the paper trading platform are important. If you’re a beginner, you should choose a platform with a variety of tools and research so that you can improve your trading knowledge.
Having research and tools available helps you develop trading strategies and decide which instruments to invest in.
Best Forex Paper Trading Platform
If you are looking to focus on Forex, we recommend the AvaTrade platform if you are outside of the US, and Interactive Brokers paper trading platforms if you live in the US.
AvaTrade is a global trusted brand. They are known for their extensive trading platform options that include web-based, desktop, and mobile options. AvaTrade offers both spot forex and forex options. They also have large asset classes for CFDs.
Interactive Brokers is also available globally. They offer the same array of trading platform options as AvaTrade. Much like AvaTrade, Interactive Brokers also offers a proprietary trade system.
Best for Options Paper Trading
If you are looking to specialize in options trading we recommend the IQ option platform if you are outside of the US, and the Interactive Brokers paper trading platform for those living in the US.
IQ Options offers a user-friendly, proprietary trading platform. It can be used for binary options trading and CFDs.
Their platform offers large charting tools that help you monitor the conditions of markets. It also offers margin trading with certain instruments.
As mentioned, Interactive Brokers also has a proprietary trading platform. With this platform, you could have a share price of $0.47 per 100 shares which is an improvement on the market standard.
Interactive Brokers offers more instruments than IQ option so if you want to expand and diversify your portfolio this is something to keep in mind.
This depends on your goals. Ask yourself what you want to achieve out of using a paper trading platform. You could list your goals and then look at some trading platforms that offer paper trading and see whether they meet your goals. We do advise you to choose a paper trading platform with a broker that you want to use for live trading as well since you’ll be used to the platform.
Paper trading is a simulated account that uses virtual currency to make fake trades. The gains and losses you make are only simulations of what could happen in live trading. But, paper trading can be used in investing competitions and in this case you can make some money via prizes.