Once you get started with trading forex, it’s not in a hurry to jump in a live account because it’s too risky to trade with real money at first time. Many traders often choose the best demo account at first. It’s much safer. Choosing a right demo account means you will have chances to master all the mechanics of trading & analysis and test your idea of trading.
- Definition of forex demo account?
A Forex demo account is for the purpose of practicing trading currencies with using virtual money. A simulated account is created to feel like you’re trading with real money.
A Demo account often operates within built platforms to mimic a real money account. The best forex brokers in the world giving their potential traders demo accounts long for earning their income until you start to trade real money.
- Advantages and disadvantages of demo accounts
Obviously, there are many good features of a demo account. It gives traders several opportunities to experience the trade without risking money. But some bad factors can be found in a demo accounts. The following information will go into detail on advantages and disadvantages.
- Identify if you like trading currencies. Typical currency pairs have a tendency to change the most between midnight and early morning.
- Practice without any risks. If you are a newbie trader, you need a lot of time to get familiar to place orders and execute trades. With a demo account, you can take time to discover without risks.
- Improve skills and strategies of forex trading. Many professional traders always seek for new strategies to test their trading idea. Demo accounts help to test and transit to a real-time execution.
- Test a particular platform. When you select a trading platform, personal preference is the most basic part of making your decision. When you’re ready to test a platform, you can observe how easily you can link, make charts and execute your trades.
- Your funds and duration will be set a limit. As a trader, you can’t practice so many times and so long with a simulated fund, brokers often set a limit for a short time. They want you to change from practice accounts to live funds because they want earn from you as fast as possible.
- A demo account differs from a live account in trading conditions. Often, an account with virtual money will be used with a demo account. As a result, it’s hard for a bid or ask to meet your criteria, an actual trade will make you surprised because it differs from a demo account.
- Trading Data may be stuffed. For some reason, all live data streams with demo accounts can be slowly updated or stuffed. You don’t have enough exact information to analyze and make your trading decision.
- Your emotional cost of trading will be faded. When you trade with real money, your emotion is real. For example, in a demo account if you lose $100,000, it’s like playing a game. But if you lose that money in real account, it’s so painful and regretful. This can change your mind in making your decision in a demo account.
- Your personal information can be exposed. If you want to have a demo account, many steps can be required to sign up for a demo account. It can include: your name, your address, your email and many private information of yourself.
Last but not least, here are my suggestions to identify the best demo account brokers:
- Exness minimum deposit
- Hotforex account
- XM account
- FXTM account
Demo accounts have negative and positive sides. With this kind of account, a serious consideration should be taken into before starting with a live account. It’s advised that you should take time and try to master everything in demo accounts before moving to a live world of trading.