Virtual Funds Practice Trading: A Beginner's Guide to Simulated Trading

The biggest challenge for new traders is the fear of losing money, but lack of experience is the main reason for losses. Simulated trading was created precisely to solve this contradiction. It allows users to practice trading in a real market environment using virtual funds without risking real money, serving as an essential step from beginner to advanced levels.

What is simulated trading? Essential knowledge for traders

Simulated trading refers to the process of trading cryptocurrencies with virtual funds within a virtual environment provided by the trading platform. Users can hone their trading skills, test strategies, and familiarize themselves with platform operations without worrying about real financial loss.

Modern trading platforms’ simulated trading typically uses a unified trading account (UTA) structure, supporting both spot and contract trading. The system automatically allocates virtual assets upon account initialization, usually including mainstream assets like 50,000 USDT, 50,000 USDC, 1 BTC, and 1 ETH, for trading experiments.

This virtual environment’s market movements are fully synchronized with the mainnet, and order execution can simulate real market conditions. However, it does not affect actual order books or market prices, which is the clever aspect of simulated trading.

Simulated Trading vs Testnet: Differences and choices

Many beginners confuse simulated trading with testnets; they seem similar but are quite different. Choosing the wrong one can waste valuable practice time.

Features of simulated trading:

Simulated trading runs within the main trading platform, with market data and price movements consistent with the mainnet, accurately reflecting real market conditions. Since orders do not enter the actual order book, they do not impact the real market. Users can switch freely between app and web versions, and APIs are available for programmatic trading. Simulated trading supports both spot and contract trading, offers a relatively rich asset allocation, and does not require identity verification to use.

Features of testnets:

Testnets are completely separate environments outside the main platform, mainly used to test new features before launch. Price movements on testnets are independent of the mainnet, and orders are executed within the testnet order book, which may not accurately reflect real-time market conditions. Testnets support more experimental features but do not support app usage; API access requires additional configuration. Assets on testnets must be manually requested, and requests are limited to once every 24 hours.

Which one should you choose?

If your goal is to practice trading skills and test strategies in a real market environment, choose simulated trading. If you want to test new features or conduct development testing, choose the testnet.

Getting started with simulated trading: Complete beginner’s guide

1. Virtual asset allocation

When you first enter simulated trading, the system automatically assigns initial virtual assets, including 50,000 USDT, 50,000 USDC, 1 BTC, and 1 ETH. No manual request is needed; they are available immediately.

If during trading your virtual asset account’s net worth drops below 10,000 USDT, you can apply for additional virtual funds to top up. Simply click “Apply for Virtual Funds” on the assets page, and the system will immediately grant the additional assets. Currently, only these four assets can be requested; other cryptocurrencies are not supported.

If your net worth exceeds 10,000 USDT, you cannot request additional assets for now. Some platforms also allow users to manually adjust virtual fund amounts according to their practice needs.

2. How to enter and exit

On the web, the simulated trading option is usually found in the top right profile menu—click to switch to the simulated environment. To return to real trading, just click the “Start Live Trading” button. On the app, the simulated trading entry is typically in the personal settings page, operated similarly.

Important: You cannot directly log into a simulated account. You must first log into your main account (or sub-account), then switch to the simulated environment. This design ensures a clear separation between your main account and practice environment.

3. Sub-accounts and simulated trading

If you use sub-accounts, good news—sub-accounts also support simulated trading. Note that the simulated accounts within sub-accounts are completely independent of those in the main account, each with its own virtual assets and trading records, and they do not affect each other.

Common questions about simulated trading

Can I reset or withdraw simulated funds?

Currently, simulated accounts cannot be reset. However, if you do not log in for more than 30 days, the system will automatically refresh the account, and all previous data will be cleared. Simulated funds are virtual assets and absolutely cannot be withdrawn—that is a fundamental principle of simulated trading.

Is identity verification required to use simulated trading?

No. No KYC or identity verification is needed; anyone can use it directly. This greatly lowers the entry barrier for beginners.

Do simulated accounts expire?

Simulated accounts do not expire over time. As long as you retain ownership of your main account, the simulated account will persist. However, if you do not access it for 30 consecutive days, the system will automatically refresh and clear related data.

How to tell if I am in simulated or real trading?

It’s simple—if you are in simulated mode, there will be a clear “Simulated Trading” label at the top of the page, making it obvious.

Why are there restrictions on simulated trading?

Simulated trading is mainly designed for practice and strategy testing, so only spot and contract features are available. Other non-trading features (like derivatives, lending, etc.) are not supported. To test these functions, you need to go to the testnet environment.

Best practices for simulated trading

The biggest advantage of simulated trading is zero risk, but this can also be a trap—users may develop bad habits. It’s recommended to cultivate strict risk management from the start, such as setting stop-loss points, controlling position sizes, and adhering to trading discipline.

Additionally, the psychological state in a simulated environment often differs from real trading—without real money fluctuating, people tend to be more aggressive. Therefore, treat simulated trading as formal training, operate with the mindset of real trading, and only then can you truly improve your trading skills.

Once you achieve consistent profits in simulated trading, gradually transition to real trading with small amounts, building confidence step by step. This progressive approach can significantly increase the success rate for beginners.