Binary Options Practice Accounts
A binary options practice account is a virtual account on a binary options platform which allows traders to test out their trading methods and strategies as well as get a feel of the market before committing funds to live account trading.
The binary options market started off at a place where there were absolutely no binary options practice accounts. Traders were then forced to do some form of demo trading on trading platforms in other markets such as the Forex market. This was not very ideal, because while traders got a feel of how the markets worked, they did not get a feel of how a typical binary options platform handles order placements and executions.
From there, the market evolved to a place where only one or two brokers offered practice accounts, but these accounts were conditional. Some were time-limited and would stop working after two weeks or a maximum of one month. For other platforms, those who wanted to use practice accounts had to open live accounts and make deposits before they would be allowed the use of a demo account. So there existed a situation where traders could not adequately practice their trading techniques and strategies because of the various demo account restrictions.
With the market yearning desperately for a change, we had to do some research to find out brokers that provided binary options practice accounts that fulfilled the following requirements:
- Prior deposits into a live account not required.
- Binary options practice accounts with no time limitations on the accounts.
- Allowing traders to set the amounts with which to commence virtual trading.
It was discovered that it was virtually impossible to find brokers who fulfilled all these conditions at once. However, there were brokers who were able to provide at least two of these conditions, and we will mention these brokers who offer binary options practice accounts as well as what traders can expect from their packages.
Demo Account – No Deposit Required
The only brokers we found that gives traders demo accounts without any prerequisite to make a deposit into a live account are Betonmarkets and Marketsworld. However, Cedar Finance is another broker which gives free demo accounts without a live account deposit only if you sign up with one of their partners. You can sign up with Cedar Finance here. Cedar Finance would otherwise require you to sign up with a $100 live account before you are allowed to trade on a demo account.
Practice Accounts with/without Time Limitations
Most binary options brokers allow traders to trade on demo accounts, but with time limitations. This is not really a problem, but depends on what you want to do with the demo account. Cedar Finance, NADEX and most brokers out there allow traders to trade on demo from two weeks to a month. If you only want to get a feel of the binary options platform or just want to understand how the market works, then this would be ok for you. If you want to do continuous testing of strategies and need a demo account that works in perpetuity, then you need to get an account from Marketsworld or Betonmarkets. However, note that these two brokers operate with proprietary platforms so the strategies you can test here are specifically designed to suit their platforms. You cannot test strategies to be used on the more widely available turnkey platforms from SpotOption, Tradologic or Tech Financials on these platforms. For these, you need to use a platform suited for these turnkey trade types, so that of Cedar Finance will work well here.
Funding Requirements for Demo Accounts
Again there are no hard and fast rules regarding funding amounts to be used for demo trading. Some platforms will allow traders to set their own funding amounts. Others may give a fixed figure. For those which give fixed figures, there are brokers that allow a maximum of $500, and others that set their funding amount at $50,000. It is usually advisable that traders use demo accounts which allow them to set the account capital as they wish. This allows them to find out what it would be like to trade small accounts, large accounts and anywhere in between. In this class, Cedar Finance, Betonmarkets and Marketsworld are the brokers of choice.
