Trading forex is not as easy as you think. A thoughtful beginning is necessary to deal with forex. For this reason, it goes wrong to jump in a live account immediately because the chance of losing is almost unavoidable at the first stage. According to experts, many traders should choose a demo account at first. It will help trader much safer. It’s critical to choose a right demo account because it’s a perfect beginning to master all the mechanics of trading & analysis and test your idea of trading.
- Definition of forex demo account?
The purpose of A Forex demo account is to practice trading currencies by using virtual money instead of real money. A simulated-trading environment is created for you to feel like you’re trading with real money.
A Demo account often works within built platforms to imitate a real money account. The top 10 forex brokers in the world giving their potential traders demo accounts want to gain their trading income until you start to trade with a real account.
- Advantages and disadvantages of demo accounts
With a demo account, of course, it has a lot of good and bad features. For example, it gives traders several opportunities to discover the trade without losing real money. On the contrary, many bad things can happen unexpectedly. The following information will go into greater detail on advantages and disadvantages.
- Identify if you like trading currencies. Important currency pairs have a tendency to change the most between midnight and early morning.
- Practice in a safe environment. As a new trader, there is a need for you to spend a lot of time getting familiar to place orders and execute trades.
- Make your skills and strategies of forex trading better. Not only for traders, the best demo account are also for many professional traders who always seek for new ideas to test their trading. Demo accounts can be tested and transited 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. In progress of testing a platform, you can follow how easily you can navigate, make charts & execute your trades and evaluate the changes of market.
- Your funds and duration will be limited. Your brokers can’t allow you to practice so many times with a simulated fund. Instead, they want to shorten the time. A change from practice accounts to live funds is their purpose because they want earn from you as fast as possible. They don’t want to wait for a long time.
- A demo account differs from a live account in trading conditions. The fact that 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 differ from a demo account. This makes you confused and don’t experience with real accounts.
- Trading Data may be stuffed. In bigger details, all live data streams with demo accounts can’t operate continuously. The information can be interrupted. As a result, you don’t get the updated information to analyze and make your trading decision.
- Your emotion of trading will be negatively affected. When you trade with real money, your emotion of trading is real. For instance, in a demo account if you lose $100,000 trading, it’s like playing a game and you think it’s for fun and no problem. But if you lose that money in real account, it’s a big problem.
- Your personal information can be exposed. If you want to have a demo account, it’s required to fill in a lot of personal information such as: your name, your address, your email and many private information. All private data will be exposed to the brokers.
After all, I want to suggest brokers with the best demo account:
- Exness accounts
- Hotforex accounts
- XM accounts
- FXTM accounts
Demo account is a good solution for beginners. It can bring you a lot of advantages but many disadvantages are unavoidable. Before trading with live accounts, you should have a careful look at them and master everything to become more confident with live world of trading.