How The Demo Exchange Works?
If you are not ready to connect your APIs yet, or you want to test some rules without the risk of losing your capital, you can trade with a virtual starting allocation. Your rules will run in paper trading on Binance.
This is a a real crypto trading simulator to test your strategies.
You have a virtual allocation of 10 BTC and 100 ETH to safely try your trading strategy with “real-market” conditions. That will help develop and adjust your rules in the most profitable way.
Paper trading on Binance with real-time prices
When you create a rule, you can choose the option “Demo Exchange” in the first dropdown. You can check your available allocation. The virtual exchange mirrors exactly the Binance exchange. That means that all the coins available on Binance can be traded in a safe environment with no risk involved. This is the best tool to test trading strategies in paper trading on Binance.
The Demo exchange is connected to Binance, that means that you can test your strategies trading all available coins on the exchange. Keep in mind that on the Demo exchange you have access to all trading pairs listed on Binance. So always double check on this page if you can trade the coin you want using the selected wallet.
As the orders will be executed, the available allocation will be updated so you can keep track of the progress of the rules. If you want to modify the allocation of the Demo exchange, you can do that using Direct Orders. You can read more about allocations here.
What is the advantage of using Demo rules?
You can create countless different strategies on Coinrule. Trading with paper balances allows you to experiment with new setups for strategies before running them on live exchanges. But the Demo exchange gives you also the possibility to improve your existing rules, testing small tweaks that could significantly increase the returns of your rules.
Usually, the main difference between testing a strategy in a demo environment and a real trading environment are the emotions involved that risk to take control of your rational side when real money is involved.
However, an automatic trading strategy doesn’t involve any emotional impact, so that testing it with virtual coins provides a better estimate of how it will work with real money.
What is the difference between Demo and Live rules?
For the Demo, we simulate the execution price to be equal to the price that triggered the condition. For now, we don’t account for the impact which the bid/ask spread of the coins may have on the results of your strategies.
The difference between the results of a Demo versus a Live rule sits mostly in that. How significant is this difference depends on how many trades the rule executes. The more trades the strategy generates, the higher may be the difference in the results.
When you execute a trade on the market, the execution price will be the ask price if you are buying, and the bid price when you sell. Why does this matter for your rules?
Also, if you are trading more liquid coins, the bid/ask spread will likely be tighter, so that the effect on your performances will be limited. On the other hand, low volume coins can have less liquidity and execution prices could be less accurate. Including an additional condition for volume or market cap could help reduce the differences between the paper trading and real trading.
A Demo Exchange is the perfect way to get started with automated trading with no risk involved!
Now create your first rule on our Demo Exchange and trade virtual coins straight away!