As an learner in the Forex trading, investing a real capital is such high risk and traders are seeking ways to avoid this dangerous investment in their first tries. Hence, the option given to those traders is to work on the best demo account before the active account.
The righi selection of the demo account would enhance the traders’ abilities in understanding the trading technically and quickly. Then, traders can test their trading concepts.
How to define a Forex demo account?
Basically, a Forex Demo account is an active simulated trading which allow trader to practice their trade on the platform with a concept money. Because this is an “sim” account (abbreviation of simulation), traders can have a full sense of real trading with a real money. On the specified trading platform, the Forex Demo account copies the functional activities of real trading account. The purpose of the best forex brokers in the world providing this service is to ensure their customers will be well-trained via demo account, then develop their business as start real trading capital.
The advantages and disadvantages
Regrading a wide provided features of Demo account, traders can be confident that they have been practiced thoughtfully their skill at no risk of losing their real capital. However, the real trading still have some features that Demo accounts cannot have
- Recognise you trading currencies preferences: as usual, the most trading currency pairs is the highest trading volume. So, their moves are mostly happen during the midnight and early morning.
- Risk free of money loss through practice: the time consumption to get used to the Forex trading such as placing orders and execution is huge for new traders
- Skill and techniques improvement: the Demo account giving more benefits than just for testing and practicing likely to the real-time execution. Actually, Experience traders use this account to check their new trading strategies and tools.
- Examining the platform: the selected trading platform is often reflecting on personal interest. Hence, by using Demo account, you can test a platform in terms of the ease of navigation, building charts and trade execution. Then, bugs and stability issues can be recognised.
- Limitation of fund and duration offering to Demo accounts: there are always a terms following the free fund of the Demo account applied by most of brokers which is the limited period of time trading on this account. As the matter of fact, they want to push you to change to the live account with the real fund.
- The difference of trading conditions in real: with the Demo account your trading fund is just a simulation. In the real trading world, the differences of the bid and the ask price is existing that your criteria may not be guaranteed the matching.
- The difference or delay of data: it is common that the Demo account cannot access to the live data streaming. In another words, the data showed to the demo account traders is delayed and incomplete from the real world.
- Lack of Cost of trading emotion: your would pay more than 100% attention to trade with your real fund. However, with $100,000 of Demo account fund, the loss is felt different from losing $100,000 from real fund. Hence, your decision of trading with Demo account is completely different from the real fund trading decision.
- Personal information under protected: your name, address and more are requested in order to register for a Demo account.
Top picked Demo account brokers are
- Exness minimum deposit
Overall, although trading with demo account is the safest way to avoid any risk of losing real fund for practicing and testing strategies and techniques, the transfer from the Demo account into real account occurs couples of unexpected issues. It is easy to move into the real investment with a live account. You would recognise how different the executions are. However, the real investment will catch more your attention and emotions which may not be found in trading with the Demo account.