How a $100,000 demo account can help you practice new investment strategies

Are you looking to practice trading without putting your capital at risk?

Sponsored by eToro (ARSN 637 489 466) / AUS Capital Limited (AFSL 491139). Invest in a diversified portfolio of stocks, ETFs, crypto, indices, commodities and currencies. Get to know eToro risk-free with a $100,000 virtual wallet. Your capital is in danger. Other fees apply. See PDS and TMD.

Disclaimer: CFDs and forex are risky investment products and most clients lose money when trading. Ask yourself if this is right for you before making a decision.

Let’s say you just scored $100,000.

Now, where it came from doesn’t matter – I’ll let you figure that out for yourself. Maybe you won a little lottery. Maybe a relative left you an inheritance. Or maybe you just have very generous friends!

The catch in this scenario is that you can’t just go out and spend big.

Instead, you need to increase your hypothetical $100,000.

So how would you do that?

Do you want to diversify into ETFs, stocks and crypto? Or maybe you prefer to get into commodities like gold?

You might even think that we are in a bear market with bonds, stocks and cryptos falling in 2022. And guess what? You would be right.

But that doesn’t mean growth is impossible.

In fact, this can be a great time to experiment with new trading strategies and look for ways to diversify your portfolio.

📈Trader’s advice! A “bear market” is a way of referring to a market that has experienced a continuous downturn. Its opposite – when a market is in a continuous rise – is known as a “bull market”.

Formal terms are also not issued by the exchanges themselves, so beware of any pundits too eager to state either in the early stages of a market reversal.

Real trading techniques – no risk to your money

Now, if you’ve been thinking about trying trading, there are a number of trading platforms that allow you to practice trading without risking real money.

For instance, eToro is offering a virtual fund of $100,000 with their demo accounts to help you practice these strategies. You can gain experience and familiarize yourself with different assets, markets and risk management tools.

You’re not putting real money at risk, but building your skills for future trading if you decide to take the plunge.

When you sign up for eToro, the platform gives you $100,000 in virtual money to learn the ropes of trading on a wide variety of assetsincluding stock, currency, commodity and cryptocurrency trading.

“With the Smart Portfolios feature, you can also browse a range of curated investment portfolios that follow a specific theme or strategy,” says Robert Francis, Managing Director of eToro Australia. “You can place trades, use stop losses and take profit orders. You are also able to easily diversify your investment range into assets with just a few clicks.”

There is also no time limit.

“You can always go back to the demo account once you’ve started your real trading journey,” says Francis. “This way, even experienced investors can explore new trading strategies without taking the risk of using their own capital.”

Of course, it’s always worth investigating a few different trading platforms to see which best suits your needs.

There is a wide variety of them, and each of them has its own strengths.

📈Trader’s advice! ASX shares on eToro are only available as contracts for difference (CFDs). Now, CFDs are for experienced investors with a high risk tolerance. So there are a few things you need to be aware of.

When you invest, you risk losing much more than the initial investment. Investors in CFDs do not own or have any rights in the underlying assets (eg the right to receive dividend payments).

Over-the-counter CFD transactions are not guaranteed by any exchange or clearing house, and investors run the risk that the issuer will fail to meet some or all of its obligations (e.g. transaction processing and return of trading profits).

So always be sure to read the product disclosure statement before investing in CFDs or using services like CopyTrader. You can also find out more in the CFD Trading Research Guide.

Make the most of the market

So, if you are considering trying virtual trading, you might be wondering what kind of trades or investments you should do.

One way to start is to watch what other merchants are buying and try it yourself on your demo account. This can be a great starting point, while providing insight into broader market trends.

François points the eToro Q3 Investor Report as a resource that new traders may find useful.

“Equities are very popular with our retail clients, according to the latest data from our third quarter retail investor survey,” he explains. “We’ve also seen a huge increase in interest in commodities this year, given their surge in prices.”

Francis also points out CopyTrader as a key feature of eToro’s platform that can benefit booming traders.

It’s a feature that provides a great option for those looking to start investing, but don’t have the time to research every investment.

Instead, by following popular investors on the platform, you can simply “copy” their trades.

“Copy trading allows investors to automatically copy successful traders and open the same positions as them,” he says.

However, if you’re thinking about investing seriously, it’s still important to do your own research.

Be sure to research your options carefully – and never assume you can rely solely on the larger market.

📈Trader’s advice! Demo Accounts don’t risk having “real” money – but that doesn’t mean they should be treated lightly either.

“There’s no point in making unrealistic trades if you don’t intend to implement them in your real trading,” says Josh Gilbert, market analyst at eToro. “Investors should behave as if they were using their own capital.”

Obtain concrete results

So if you have tested a few strategies with virtual currency on your demo account and had some success, you may be wondering if this will translate into real results.

Well, nothing is certain when it comes to investing.

Investing can be an effective way to grow your wealth, but it’s important to remember that it comes with high risk.

We strongly suggest you do your research. You can start right here on this site – we have a variety of step-by-step guides – but we always suggest you research as deep and extensive as possible.

But there is one basic rule you should always follow:

Never invest more than you can afford to lose!

Disclaimer: This information should not be construed as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be taken as investment advice or construed as providing recommendations of any kind. Trading futures, stocks, ETFs and options involves substantial risk of loss and is therefore not suitable for all investors. Trading CFDs and forex with leverage carries a higher risk of losing money quickly. Past performance is not indicative of future results. Consider your own situation and get your own advice before you trade.

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eToro Disclaimer: eToro service ARSN 637 489 466 promoted by eToro AUS Capital Limited ACN 612 791 803 AFSL 491139. Venture Capital. Other fees apply. See PDS and TMD. This communication is for general informational and educational purposes only and should not be considered financial product advice, a personal recommendation, or an offer or solicitation to buy or sell any financial product. It has been prepared without taking into account your objectives, financial situation or needs. Any reference to past performance and future indications is not and should not be considered a reliable indicator of future results. eToro makes no representations and assumes no responsibility for the accuracy or completeness of the contents of this publication.

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