Forex is a complex and risky world, if you’re a new trader, the chance of winning is almost zero because you don’t have any experience in trading. For this reason, I advise you to begin with the best demo account brokers. It’s not in a hurry to jump in a live account immediately. It’s more logic to choose a demo account at first. Choosing a right demo account means you will have chances to have an understanding of all the mechanics of trading & analysis and test your idea of trading.
- Definition of forex demo account?
Basically, A Forex demo account helps traders to practice trading currencies with using virtual money instead of real money. Brokers will make a real account-like environment to make traders feel like you’re trading with real money.
A Demo account often operates within built platforms to mimic a real money account. Brokers giving their potential traders demo accounts really want to get their income until you begin to jump in a real account.
- Advantages and disadvantages of demo accounts
We can list a lot of advantages and disadvantages of demo accounts. Typically, it brings traders several opportunities to discover all activities of trading without risks. But we can’t deny some disadvantages found in a demo account. The following analysis will go into detail on advantages and disadvantages of demo accounts.
- Determine if you like trading currencies. Typical currency pairs are likely to change the most between midnight and early morning.
- Practice in a guaranteed way. If you are new to trade and don’t know about trading, it’s critical to get familiar to place orders and execute trades. Remember that take more time for that until you become more confident.
- Improve skills and strategies of forex trading. Many experienced traders always try on new strategies to test their trading idea. Demo account is a perfect tool to do that without risk.
- Test a particular platform. When you choose a trading platform, personal preference is the most basic part. In progress, you can follow how easily you can navigate, make charts and execute your trades.
- Your funds and duration will be limited. As a trader, you can’t be free to test so long with a simulated fund, the best forex brokers often set a limited time for you. Their purpose is to want you to vary from practice accounts to live funds. At that time, they can earn from your live account.
- A demo account is different from a live account. Often, an account with virtual money will differ from a live account. As a result, it’s hard for a bid or ask to meet your criteria because a lot of unexpected cases in real trade will happen and sometimes it doesn’t follow rules of demo accounts.
- Trading Data can be stuffed. Sometimes, all live data streams with demo accounts can be interrupted continuously. This leads to the wrong information from database.
- Your emotion will be down. Trading with real money, your emotion is real. For example, in a demo account if you lose $100,000, it’s like playing a game. You won’t feel anything. But if you lose that money in real account, it’s a big problem.
- Your private information can be unveiled. Often, it’s required to fill in registration form with a lot of personal information such as: your name, your address, your email and many private information of yourself. All information will be exposed to brokers.
Finally, I’d like to introduce to brokers with the best demo account:
- Exness accounts
- FXTM accounts
There are both advantages and disadvantages in a demo account. It’s advised to take use of its advantages. You can use it to experience your trading and master the necessary skills of trading before moving to a live account. In addition, an understanding of disadvantages is a good way to avoid risk and any cases in trading.