Demo account
A demo account is a practice account from a broker or platform that mirrors live pricing with virtual funds, used to learn the platform and test strategies without money at risk.
A demo usually shares the live product's interface and data feed, with a resettable virtual balance. It is the fastest way to learn order types, charting tools, and platform mechanics before any capital is involved, and it is the broker-hosted form of paper trading.
Execution tends to be more forgiving than live — spreads can be idealized and slippage minimal — and the psychological weight of losing is absent. Demo profitability is necessary evidence, not sufficient; the distance to live conditions is examined in paper trading vs demo vs live.
In a prop-firm challenge
A plain demo has no rules, and that is precisely what it fails to teach. An evaluation is, in effect, a demo with an enforced profit target, daily loss limit, maximum drawdown, and minimum trading days — constraints that change behavior under pressure. Months of profitable trading on an unconstrained demo can coexist with habits an evaluation ends quickly, such as averaging into losers or risking a week's progress on one idea. Practicing on a simulator that enforces challenge rules closes that gap directly; the structure of those rules is described in what a prop-firm challenge is.