For a new trader in the forex market, it is crucial for beginners that they take advantage of the forex demo account as a learning tool as well as a platform for strategy testing before making a live account.
Therefore, by using a demo account, you’ll learn different things in the forex market, simulate real-world trading and test different strategies. This article will show you the basic knowledge of demo account and the attributes that they have.
Studying forex demo accounts
Demo accounts offer you a chance to test a forex broker’s trading platform. These accounts let you use virtual money to make trades instead of using real money. They help you learn trading style – whether you are more comfortable with intraday moves or longer-term position hold. They can also aid you to learn about the platform since it feels like you are trading in real life.
The best forex brokers who offer these accounts want to have your business after you finish all your skills with a demo account and begin actual trade.
Strengths and weaknesses
There are many attributes that demo accounts have and tradesman is given an opportunity to sharpen skills with a risk-free environment. But demo accounts don’t have everything that actual accounts have.
- Test if you love trading currencies. Most used currencies seem to be unstable between days.
- No fund needed. A novice will need lots of time to be familiar to the trading forex and how it works.
- Expand your skills. Many traders want to find various tactics to test when they have enough experience and the best demo account is a good choice to try them before they do it in real account.
- Check a particular platform. Choosing a platform to work with is a hard part and you usually choose it base on your preference. It would be easier to navigate and do transactions after understanding a platform. Besides, you can ignore problems that might happen.
- Many restraints. Intermediaries tend to narrow the duration of demo accounts so that you can’t trade with fake money for too long. In fact, they want traders to quickly execute real trade as fast as possible.
- Different trading conditions. Always remember that you can only utilize virtual funds when you are a demo user. Hence, if you have a nice trade while using a demo account, it doesn’t mean that the transaction would have happened.
- Wrong or late data. Brokers don’t want to waste too much money on live data for demo traders. Thus, you have to work in a bad situation such as wrong or slow data.
- You don’t know the true value of trading. Everyone should be very anxious if they lose $100,000 in actual account. Meanwhile, $100,000 in a demo account is nothing. Therefore, you can’t have the true feeling while being a demo user. Always be careful when you work with real account because your balance is affected by it.
- Information-stealing. If you want to create an account, you ought to fill in the form that requires your personal information such as name, address and so on. It might put you in danger.
To me, the greatest demo account brokers are:
Demo accounts are an excellent way to learn a forex trading platform and get an initial feel for the world of forex trading. The best ones not only match your trading style but also offer instruction and support. However, a demo account alone does not prepare you for real-world trading. That is why after using a demo account and finding the right platform for you, start your actual account to be a true tradesman. Don’t get stuck with demo account forever.