A demo trading environment that mirrors live market conditions, used by modern prop firms for both evaluations and funded accounts.
A simulated account (also called a "sim account" or "demo account") replicates real market conditions without using actual capital. Most modern prop firms operate entirely on simulated accounts.
How Simulated Accounts Work
- Real market data: Prices match live markets in real time
- Simulated execution: Orders are filled against the live feed but don't enter the real market
- Real profits: Despite trading in simulation, your profit share is paid out as real money
Why Firms Use Simulated Accounts
- No capital risk: The firm never puts real money at risk in the market
- Scalability: Can support thousands of traders simultaneously
- Lower costs: No brokerage fees, exchange fees, or regulatory requirements of real accounts
- Instant provisioning: New accounts can be created immediately
Simulated vs Live Differences
While simulated accounts closely mirror live trading, there are some differences:
- Slippage: May be less realistic — sim accounts often fill at exact prices
- Liquidity: No impact on market — large orders always fill instantly
- Partial fills: Rarely happen in simulation but are common in live markets
- Commissions: Usually simulated but may differ from live rates
Is It "Real" Trading?
Yes. The skills, strategies, and discipline are identical. The market data is real, the P&L is real, and the payouts are real money. The only difference is that your orders don't physically enter the exchange.