Amateurs and beginners are largely unaware of the dynamics of market movement and very susceptible to severe losses if they are unable to read the market conditions accurately.
Therefore, to learn the fundamentals of trading in the Forex markets, the best demo account is capable of replicating the market through simulated trading conditions. These accounts are virtual trading accounts that contain virtual trading capital, thereby eliminating the risk to traders and speed up the learning process.
I’m here to help you on how to approach the market through demo account.
Studying forex demo accounts
As we know, demo accounts provide a platform in which you can practice trading forex with no harm to your real balance. They give the feeling that just as you are doing real trading since it mirrors real account in many aspects.
One thing to take note is that intermediaries would like to cooperate with you when you are tough enough to do genuine transactions.
Positives and negatives
With so many great features that demo accounts have, traders are able to study and develop their skills in a safe environment but don’t comprise all attributes of an actual account.
Positives
- Find out whether you prefer trading currencies or not. In fact, the most famous currencies are very volatile during night time.
- Risk-free trading. A Forex demo account offers the convenience of sampling the financial market with zero risks to the trader which gives great freedom to the trader to invest in any manner as they desire.
- Study skills and methods. A demo account is the best option for experimenting with different strategies, and to develop trading programs. Adepts prefer this advantage of demo account.
- Evaluate a trading platform. A demo account can be used to analyze the performance of the best forex brokers, and evaluate the overall services of a trading company. It is better to have an overall picture of the trading platform and ignore problems.
Negatives
- Time and money are restricted. No broker will give you an eternal practice account or an endless amount of funds to trade with. They want you to be a real trader after a specific time.
- Dissimilarities in trading conditions. There is nothing to ensure your trade could have proceeded while you are a demo user. Thus, it is impossible for traders to enjoy the same conditions offered by a real account through a demo account.
- Failed data. Intermediaries normally won’t provide live data for practice accounts. This leads to bad data or slow data that you have to suffer.
- Trading psychology. Forex practice accounts deal in virtual money, which doesn’t invoke any emotional responses in a trader. Profits and losses carry no sentimental value. For example, losing $100,000 is such a pain in real life, but it is nothing if you lose $100,000 in a practice account. Therefore, a demo account is incapable of replicating the real-life emotions of a live trading account.
- Giving out information. It is dangerous if you reveal your information by applying for a demo account in brokers that don’t have the reliability.
This is the top practice account brokers that I recommend for you:
- Exness accounts
- Hotforex accounts
- XM accounts
- FXTM accounts
Conclusion
Demo trading Forex accounts are excellent options for both amateur and professional traders to learn and to test their different tactics through a no-risk environment. Nevertheless, it is a total difference in actual trading when the time comes to switch to a live account. Although you may feel ready for the markets, take it slow, and start trading in small amounts with trading capital you can afford to lose. Besides, always ensure you follow all the money management principles and trading strategies you have developed through your demo trading.
