It’s not a good beginning for you if you choose a live account at the first time because you don’t have a lot of experience and skills to trade. The chance of loss is almost unavoidable. For this reason, it’s better for many traders to choose the best demo account in the beginning. Choosing a right demo account give you more chances to learn all the mechanics of trading & analysis and test your idea of trading.
- Understanding of forex demo account?
A Forex demo account is used to practice trading currencies with using virtual money instead of using real money. Brokers will create a trading virtual environment with a simulated account to help traders feel like you’re trading with real money.
A Demo account often operates within built platforms to mimic a real money account. Brokers offering their potential traders a demo account want to get their income until you begin to trade with a real account.
- Advantages and disadvantages of demo accounts
Anything has two sides. For a demo account, there are also advantages and disadvantages. For instance, several opportunities will be made by the best forex brokers BRKV to check the trade in a safe way. On the contrary, a demo account contains a lot of risks as well. The following features will go into detail on advantages and disadvantages.
+ Advantages
- Identify if you like trading currencies. Typical currency pairs are likely to change the most between midnight and early morning.
- Practice without any risks. As a new trader, I advise you to get familiar to place orders and execute trades. Luckily, you can do it without risk.
- Improve skills and strategies of forex trading. Many professional traders tend to look for new strategies to test their trading idea. Demo accounts can do it in terms of testing and transiting to a real-time execution.
- Test a specific platform. When you select a trading platform, it can boil down to personal preference. When you’re ready to test a platform, you can observe how easily you’re able to navigate, create the charts and execute your trades.
+ Disadvantages
- Your funds and duration will be set a limit. A broker will set the limit to the time you practice with a simulated fund, brokers often set a limit for a short time. They just want you to move from practice accounts to live funds because sometime they don’t have enough patience and time to wait for you. They want to earn as soon as possible.
- A demo account differs from a live account. Some unexpected cases in live accounts are different from those in demo accounts. It’s hard for a bid or ask to meet your criteria, an actual trade won’t sometimes happen in the way you did it in demo account.
- Trading Data may be stuffed. All live data streams with demo accounts can be interrupted due to trading system. As a result, you don’t have enough exact information to make your trading decision.
- Your emotion cheats you. When you trade with virtual money, you will don’t feel your emotion. For example, in a demo account if you lose $100,000, it’s like playing a game. You just think it’s not business, just a game. But if you lose that money in real account, you will experience a painful and regretful feeling. This can change your mind in making your decision in a demo account.
- Your information can be exposed. A lot of websites require you to provide with personal information, such as: your name, your address, your email to sign up a deme account. They can sell your information to a thirty party or use it for specific purpose.
To sum up, I want to unveil the brokers with the best demo accounts:
- Exness minimum deposit
- Hotforex
- XM
- FXTM
- Conclusion
Demo accounts have good and bad factors. With this kind of account, you should have a thorough understanding of its features. After mastering it, it’s necessary to move to a micro account or a live account with care.