Have you ever wanted to practice or try a certain trade before risking your hard-earned money? Paper trading accounts allow you to simulate buying and selling stocks without using your real-life funds.
The term paper trading dates back to before online trading platforms gained widespread popularity. Traders would write their trades out on pieces of paper before executing them in the real live market.
To practice with paper trading you will need a brokerage that offers a demo account to users. This gives you access to the simulated trading environment where you can hone your trading skills. It is an excellent opportunity to practice new trading strategies like options trading and day trading.
Luckily for Canadian traders, there are plenty of free paper trading platforms to use. In this article, we’ll discuss our choices for the 5 best paper trading platforms in Canada for 2023.
Best Paper Trading Platforms in Canada
1. Questrade Practice Account
Questrade is one of Canada’s oldest and largest discount brokerages. It offers low-cost investing by buying stocks for as low as $0.01 per share. What you might not know is that Questrade also offers an excellent practice account for you to test your skills.
The Questrade Practice Account allows you to test-trade stocks, ETFs, and options that trade on the TSX, NYSE, and NASDAQ exchanges, among others. You start with $500,000 CAD and USD of practice cash to make trades as you wish.
Note that the simulated market runs data from the day before, so not all prices will be 100% accurate.
For trading equities, the practice account is available for users of the Questrade Edge Web and Questrade Edge Desktop platforms. If you are looking for an FX or CFD practice account, you will need to have access to the Questrade Global platform.
This platform offers over 110 different currency pairs and even commodities trading.
If you are still looking for some direction, Questrade offers plenty of lessons and platform tutorials. For those that prefer interaction, there is also live chat support available on the Questrade app at all times.
When you are ready to go live, you can open a regular Questrade account and get a $50 free trading credit after funding your account with $1,000 or more.
Questrade Practice Account Pros and Cons
With the Questrade Practice Account, you get an accurate platform simulation. It is risk-free for 30 days, at which point you can reset your account and start again.
There is no charge for using the Questrade Practice Account, whether you are a new or existing Questrade user. Get $500,000 in virtual cash to use with any trading strategy you wish to try.
Unfortunately, Questrade Practice Accounts are not available for the mobile app, so you will need to be using the desktop app. Some of the data in the Practice Account might also be inaccurate, including asset prices and options chains.
2. Interactive Brokers
Interactive Brokers is a global trading platform that is available in more than 200 different countries and territories around the world. As of the time of this writing, the platform has well over 2 million users.
Interactive Brokers is widely known for its zero-commission trades for stocks and ETFs, no account minimumInterabalance, and low fees for options contracts.
The Interactive Brokers Paper Trading Account is an exact replication of the company’s widely-used trading platform. Users begin with $1 million USD in virtual cash in the demo account, allowing a lot of trading practice.
Keep in mind that to use the Interactive Brokers trading platform, it is recommended that you download and install the Trader Workstation (TWS) desktop app.
Before you jump into the paper trading environment, you will need to sign up for both an Interactive Brokers account and a paper trading account. The latter of these can take up to 24 hours to confirm.
Interactive Brokers Paper Account Pros and Cons
Interactive Brokers is a well-respected trading platform, and its software has won plenty of awards. Despite this, there are common complaints about how the Trader Workstation software is both antiquated and complicated to understand.
The Interactive Brokers paper trading account is another free account offered to users. With $1 million USD of virtual cash to practice with, Interactive Brokers is one of the best free paper trading accounts for experienced traders.
Related: Questrade vs Interactive Brokers.
3. TD Ameritrade Paper Trading Account
TD Ameritrade is one of the largest trading platforms in the United States. It is owned by the investment firm Charles Schwab and currently has over 11 million users.
TD Ameritrade’s award-winning trading software is called Thinkorswim, which comes with a full suite of trading tools, charting, and market analysis available.
The platform also has a paper trading account available called the Thinkorswim paperMoney environment. It is free to use for TD Ameritrade users as long as you have the Thinkorswim software installed and an account created.
In your paperMoney account, you will gain access to $200,000 USD in virtual money to trade stocks, ETFs, and options, as well as $10,000 USD for forex trading.
Users can add more virtual cash if needed and adjust their balance to reflect a more accurate amount of money to trade with. Make a mistake on a trade? No problem, Thinkorswim paperMoney allows you to reset your account whenever you want and as many times as you want!
TD Ameritrade Paper Trading Account Pros and Cons
TD Ameritrade Thinkorswim is a highly-rated trading platform for American traders. The Thinkorswim paperMoney demo trading account allows users to test and try new trading strategies at no charge and with no risk.
The Thinkorswim platform can be complicated to use for beginners, which makes the paperMoney account even more important to use before trading with your real money.
Unlike other platforms, the TD Ameritrade paper trading account is available on both desktop and mobile apps. Another bonus is that with the Thinkorswim paperMoney account, you get access to NASDAQ Level II data, stock screeners, and market research tools.
4. Wall Street Survivor
Wall Street Survivor is a popular stock market simulator that presents itself like a computer game. Unlike other paper trading accounts, Wall Street Survivor is a real-time market simulator that allows you to practice trading stocks, ETFs, options, and even cryptocurrencies.
Registration for Wall Street Survivor is free. Once you have created an account you get access to $100,000 USD in virtual money to trade at your heart’s content.
Not only do you get to practice your strategies, but you can even enter contests on Wall Street Survivor to put your new strategies into action for real cash prizes.
Wall Street Survivor offers plenty of free trading education and courses and even incorporates a social aspect to trading by tracking your friends or some of the best-performing traders. There are over 1 million registered users creating an incredible Wall Street Survivor community.
You can even create your own customized Wall Street Survivor game and challenge your friends or other users. Wall Street Survivor is looking to put the fun back into learning how to trade on the stock market.
Wall Street Survivor Pros and Cons
Wall Street Survivor takes a novel approach to practice stock market trading. With $100,000 USD in virtual cash at your disposal, you can learn how to trade everything from stocks to cryptos.
The social aspect is a nice twist to Wall Street Survivor. Engaging in a community of traders makes this stock market simulator a fun way of learning about trading.
While the website advertises everything as free, there are some hidden costs for Wall Street Survivor. You will need to pay a one-time cost of $19.95 to gain access to the premium content and full courses on the site.
5. Scotia iTrade Practice Trading Account
Scotia iTrade is another popular trading platform for Canadian investors. It is a big bank brokerage that provides a long list of assets to trade, including stocks, ETFs, and mutual funds.
With the Scotia iTrade Practice Trading Account, you can access $100,000 CAD and $100,000 USD in virtual cash. You can use these funds to trade limit or market orders for equities and ETFs that trade on the Canadian and US markets.
This free demo trading account also provides you with performance tracking and PnL monitoring, as well as the ability to integrate it directly into your live Scotia iTrade account. Gain access to research reports, real-time market news, trading tools, and stock analysis.
Related: Here’s a detailed review of Scotia iTrade.
Scotia iTrade Practice Trading Account Pros and Cons
Scotia iTrade Practice Trading Account is an intuitive and easy-to-use platform. It is free to sign up for and provides all of the additional benefits of using a real live Scotia iTrade account.
Starting out with $100,000 CAD and $100,000 USD is great, but you can also reset the account whenever you need to.
If you choose to use the Scotia iTrade live account, there are higher-than-average trading fees, as well as account fees, that can add up. You can sign up for other discount brokerages with lower fees once you have used the Scotia iTrade Practice Trading Account.
What is Paper Trading?
Paper trading is the ability to practice or test a trade or trading strategy without risking real money. It is also known as a demo trading account, a virtual trading account, or a stock market simulator.
It is an effective way to gain experience with the repetition of executing trades. Trading with a free paper trading account is one of the only ways to simulate what it is like to trade on the real stock market.
Paper Trading vs Real Trading Account
The major difference between a paper trading account and a real trading account is that in a real trading account, you are trading with your real money. Paper trading accounts use virtual cash, which is a great way to learn from your mistakes.
Paper trading accounts typically are not entirely accurate in terms of market data. The prices of stocks and indices might be slightly off as these platforms usually do not use a real-time market simulation.
Pros and Cons of Paper Trading
The benefits of paper trading are clear: not risking your own money while gaining trading experience is an ideal way to approach the stock market.
It is a risk-free environment to hone your trading skills before using them in a real-world setting. If you make a mistake you can always reset your paper trading account. Obviously, this is not something you can do with a real live account.
Paper trading is useful for both new and experienced traders. There is no risk and no stress involved in executing paper trades. Paper trading can help build confidence as well as get comfortable with advanced trading strategies.
But too much paper trading can lead to complacency and a lack of commitment because we know the money is not real. This can be dangerous because we can develop a mindset that making mistakes isn’t costly.
Being able to reset or cancel trades is not reflective of how the real live markets work. Additionally, paper trading lacks the emotions you have when trading with real money.
Finally, in a paper trading environment, you are not exposed to how dynamic the markets are. Trading algorithms and global events do not exist in a paper trading world, so it is not entirely reflective of the true trading experience.
How to Choose a Stock Market Simulator?
When it comes to choosing a stock market simulator, it is important to use a platform that you want to be familiar with for your real-life trades. If your brokerage offers a practice account, it makes sense to use what you are used to.
Other features you should look for are the simulator should be free, provide you with plenty of virtual cash, and offer trading tools and portfolio analysis.
Make sure the assets that you want to learn how to trade are included. These include but are not limited to stocks, ETFs, options, and cryptocurrencies.
How to Use a Demo Trading Account
Demo trading accounts are typically fairly easy to sign up for. You do not always have to be a registered user for that brokerage to get access to a paper trading account.
Once you have registered and logged in, it is time to start trading. It is recommended that you begin with an account balance that is similar to what you have in your live account. This will make it a more realistic experience.
From there, you are truly free to use the demo account as you wish. Nothing can be broken, and no real money is at risk, so this is the time to experiment.
Use this demo trading account to learn how to use things like limit prices, stop losses, and various options strategies.
Once you have successfully and consistently traded for a profit in the demo trading account, you can feel confident enough to transfer those skills to your real live account.
Should You Use Paper Trading?
Yes! Paper trading is an excellent exercise, no matter what your trading experience is. Even experienced traders need to use a paper trading account to sharpen their skills from time to time.
For beginners, it is even more important to utilize paper trading. The stock market can be ruthless so getting some experience in the demo account is essential to surviving your first few years as a trader.
The best overall platform for paper trading in Canada is the Questrade Practice Account. It has a great interface, and when you are ready to jump into the live market, Questrade has the lowest trading fees.
Yes, through the TD Ameritrade Thinkorswim platform, traders have access to the paperMoney demo trading account.
Yes, Canadians can have access to Thinkorswim through the TD Canada Direct Investing platform. Canadians cannot open a TD Ameritrade trading platform as of 2023.
As of 2023, TradeStation is no longer available to Canadian investors. As an alternative, Canadians can use Questrade, Scotia iTrade, or Interactive Brokers, amongst others.
Even though Canadians cannot use WeBull to trade in a live account, you can use other features, including opening a paper trading account.
Yes, any of the paper trading platforms in this article are free for Canadians to use. Questrade, Scotia iTrade, and Thinkorswim on TD Direct Investing are just three examples of free paper trading in Canada.
Paper trading is a great way for beginner investors to learn how to execute trades. It also allows you to try new trading strategies without risking your own real money.