Why does a beginner trader should use the demo account? Because they can learn how to operate the trading platform effectively and to learn the foundations of trading. In short, the best demo account provides beginner traders with the necessary experience to help them learn how to limit their trading losses as well as to learn how to control their fears and greed.
Therefore, this article will help you figure out what brokerages are giving out the best demo account based on many elements.
A closer look into the forex demo accounts
Demo account is the type of account provided by trading platforms and there is one symbolic virtual money to help traders experience the use of trading platforms as well as experience services from a broker.
You are able to practice trading with no real money needed thanks to these accounts. The aim of brokers when giving out these accounts is to have your business once you start to work with real funds.
Benefits and disadvantages
Needless to say, the demo account is such an account that provides the trader with lots of opportunities to train skills with risk-free and to obtain experiences. However, nothing is perfect, the demo account doesn’t have some traits that real accounts have.
Benefits
● Figure out if you love trading. As we know, the most popular currency are commonly unstable, especially between late night and early morning.
● Training with no payment. New traders really enjoy this advantage. It is so good to have a free environment to study the trading forex. You can learn how to place orders or ways to execute trades.
● Improve skills and methods. Masters always seek new tactics to test and tools to incorporate. Once you are good enough, it is time to deal with real money.
● Try out a certain platform. Remember one thing that you should not pick up a trading platform based on your preference. With this attribute to check a platform, it is not so hard to navigate or do the transaction. Furthermore, you can ignore problems that could happen while trading.
Disadvantages
● Limitation in fund and time. The best forex brokers 2019 offer this special account but they don’t forget to make some limitations. You can use fake money to trade for free but just for a given duration. The purpose of this restriction is to make sure you don’t stay in the demo accounts forever and use the real money to trade.
● Actual trading conditions differ. You are not able to use anything but the virtual fund to trade with a demo account. Even if you find out a great transaction, it is uncertain that the trade would have happened in your life.
● Bad data. Usually, intermediaries will not give out live data streams for demo account users. It makes you hard to act due to the wrong and slow data.
● Losing the emotional cost. It is too bad that traders can’t have the real emotion trading while using the demo account. Obviously, no one would be anxious if they lose $100,000 that they get from the demo account. In contrast, it is a big deal if your $100,000 fly away in real life. Thus, be cautious when making a decision with a live account.
● Giving out personal information. One disadvantage of the demo account is that your information might be revealed. It is because you have to fill in the registration form with basic information such as name, address…
The top four demo account brokerages are as below:
- Exness minimum deposit
- Hotforex
- XM
- FXTM
Conclusion
Demo trading certainly has its place. But at the end of the day, if you don’t jump in and get your feet wet, you’re never going to develop the necessary mental skills to succeed in the market. If your end goal is to trade consistently and make real money, then you need to start trading a live account before too long. Once you have learned an effective trading strategy you really only need to practice it on a demo account for one to three months before trying live trading.
