There is a growing recognition that demo forex account should be given to traders because all traders do not want to lose their money at the beginning. In reality, it would be really helpful for traders to experience the best demo account before using live account. This helps them fully understand forex market, forex trading platforms, and other important features. Nonetheless, it is crucially important that traders should opt for the suitable demo accounts because it helps them clearly understand the mechanism of forex trading market and enables traders to test their trading strategies.
- What is forex demo account?
Basically, forex demo account enables traders to experience trading currencies without using their real money. It’s because traders will use virtual money to trade instead of using real money. Forex demo account often refers to “sim” account( short or simulation). When you trade with forex demo account, it feels like you are using your real money.
It is the fact that brokers want to get profits when you use live account Therefore, they decided to offer forex demo account.
- Advantages and disadvantages
Traders have a chance to test trading conditions, trading platforms, and their trading strategies when it comes to forex demo account. In fact, demo account has some advantages and disadvantages illustrated by following points.
- Practice trading without losing money: you will be able to place orders and execute trades effectively when you use forex demo account. It’s because demo account allows you to experience forex trading platforms.
- Improve your skills and techniques: demo account allows traders to find new strategies and techniques in order to improve their trading performance.
- Make decision whether you like trading currencies: Midnight and early morning are the time that popular currency pairs have the most volatile moves.
- Test a specific platform: Traders can test a specific trading platforms thanks to demo account. In addition, they can know whether their trading strategies are effective or not and make them create charts as well as make trades easily.
- Demo accounts may be restricted in funds and duration: the best forex brokers offer demo account because they want traders to experience forex market. In fact, the funds are totally free but it exists only a short period of time. It’s because brokers want their customers to transfer to live account after using demo account.
- Real trading conditions are different: it is the fact that you only use virtual money when it comes to forex demo account. There is no evidence that there was a bid or ask meets your standard, a real trade would happened.
- Data may be delayed or different: you might trade with procrastinated data because not many brokers offer live data streams.
- You don’t learn the emotional cost of trading: when you use your real money in live account, it seems to be different. For example, losing $100,000 in demo account is not a big problem because the money is virtual. But if you lose 100,000 in live account, it will be a big problem because the money is real.
- You have to reveal personal information: it is because you have to provide your personal information such as name, address when you register an account.
Here are top 4 forex brokers with best forex demo accounts.
- Exness accounts
- Hotforex accounts
- XM accounts
- FXTM accounts
In one word, experiencing demo account is considered to be an effective way to help traders experience forex market without risking their money. They have many chances to test their trading strategies and create some effective techniques while they’re trading with demo account. However, you should not think that you will be successful when you switch to live account. When you use live account, you should pay much attention to trade execution because you are using your real money.