FX Demo account / Advantages & Disadvantages.
In this blog I will talk about the pros and cons of trading with a demo account.
Many novice traders will often first start trading on a demo account before going live.
It is of course very good that with a demo account you can test your strategy and can already practice a little before you start trading live.
You have several options to practice your strategy before you go live. In addition to a demo account, you could also trade on a simulator.
But today I’m going to talk about a demo account. Let me start with the benefits.
Advantages FX Demo account.
- See if you like trading forex.
Especially if you are completely new to the world of Forex trading, opening a demo account can be very useful to see if it is for you.
- Start trading without risks and test your strategy.
If you are still learning about forex trading, trading a demo account can be very useful in the beginning.
This way you can first practice well without risks.
- Practice good money management techniques.
Money management is perhaps one of the most important things to be able to become a good forex trader.
With a Demo account you can test and adjust this so that your money management is also completely correct before you start trading live.
- Test a new trading strategy without losing money in your real account.
You can also use a Demo account perfectly for this.
Test a new strategy and only start trading if it is completely correct.
This way you can test the new strategy well and you will not lose any capital on your real account.These are a few advantages of a Demo account.
But of course there are also some disadvantages to a Demo account.
I’m going to list these for you now.
Disadvantages FX Demo account.
- Real Trading Conditions May Differ.
Although demo trading seems very realistic and uses real exchange rate data as it unfolds, the reality of trading can be quite different,
especially during the fast markets surrounding major economic data releases or during major news event announcements.
- Demo spreads can be tighter.
- You might learn to overtrade.
The risk is greater that you will overtrade in a demo account.
Of course you do not run any real risks, so you take a trade faster than you would in real life.
So there is a risk that you will learn this bad habit by trading in a demo account.
- Your emotional response may be different than in a live account.
This is something I also hear very often from various novice traders.
They were so good on a demo account, but now that they started trading live it goes completely wrong.
How is that possible all of a sudden?
There is a good explanation for this in a demo account you have much less emotions than in a live account.
In a demo account you simply have nothing to lose at all and if you lose you increase your demo money again right?
In a live account you do have something to lose and that means that you trade emotionally differently than in a demo account.
Conclusion FX Demo account.
Trading in a Demo account has its advantages and disadvantages.
And this will also be different for every trader if you are a novice or advanced trader you should see if it works for you.
And as soon as you notice that you are going to get bad habits by practicing on a demo account, you better stop trading on a Demo account.
It is such a big difference between a demo and real account.
Once you are trading with your own real money, emotions will get involved.
That is why you need to take your time and wait until you are completely sure of yourself.
If not, keep practicing.
Do you want to open a Forex account? Demo or real?
Then take a look at these brokers.
Do you want to become Success Supply and Demand Trader or want to know more about FX Demo in the forex market?
If you are a beginner trader and to become a good professional forex trader. Want to know more about How forex leverage works? The Forex Scalper teaches you the best scalping trading strategy using supply and demand zones which are already traded and tested by thousands of TFS members and performs daily trades.
To become profitable from Beginner Trader and most successful Scalping trader in Supply and Demandjoin THEFOREXSCALPERS and trade with 3500+ community traders with daily analysis and educations which boosts your trading skills make you Professional Forex Market Trader.
Results – Instagram
Looking for a Trusted Regulated Broker?
TheForexScalper recommends you join ICMARKET which is regulated and the most trusted broker. They provide very tight raw spread account with fast execution and having multiples deposit and withdrawal options.