There are two types of accounts in trading such as demo and live account. If you are planning to trade the live account, we warn you not! As beginners, you should not straightway enter into the live account. If you do it, you will not be able to protect your trading account from washing out. This is why even successful traders in Singapore advice beginners to begin with a demo account. But there are different ideas and thoughts about the demo account. Some treat demo account as something beneficial, whereas some others avoid it altogether.
Demo and live accounts are different, learn the difference
Let’s begin with technical differences in the demo and live accounts. Basically, there are no differences when we consider the technical side of demo and live account. You can see all the essential features in a demo account that you will find in a live account. Automated trading and indicators are also available on the demo account. The currency rates on the live and demo account will have differences, so that is something you need to know.
The spread will not change in a demo account, whereas spread will change in a live account when there is high volatility. For example, if you are generating profits during a news announcement in a demo account, it will not reciprocate in a live account. Likewise, there are a lot of changes in a demo and live account, but that doesn’t mean your trading practice will have a considerable impact. You are going to get the benefit of learning the market and its background through demo trading. Therefore, giving up on a demo account is not a wise move.
Developing your trading skills
To make a consistent profit, you must have the right skills. You need to understand the nature of CFD trading business. Some of you might buy expensive trading strategy from the pro traders but it will never work in the long run. Trading strategy greatly depends on the trader’s mentality. If you fail to trade this market with managed risk, chances are very high you will lose a big portion of your investment. Take your time and focus on simple logic.
Making consistent profit in the Forex market is all about finding high-quality trade setups. And to do so, you must have the right skills. Never push yourself too hard to develop a complicated trading system. Rely on simple technique and you will get better at trading.
The demo account money vs. real account money
A beginner will never worry about the money on a demo account. Therefore, when the trade focuses on account size, it will not be thoughtful. The trader will think that virtual money is not important, so he or she doesn’t have to be thoughtful when trading it. In fact, losing trades on a demo account will not be as serious as losing trades on a live account. However, this needs to change, and you should respect the money involved in a demo account if you want to practice successfully!
The demo account emotions are different
This is one of the crucial points in trading because emotions are a part of trading. If your emotions are not genuine in the demo account, you will not be able to work it out on the live account. Of course, it can be hard, but over time, you will learn it.
You should not avoid demo account like some because it will lead to a higher rate of losses. If you like it or not, you should begin the trading journey with a demo account. Once you start trading on a demo account, you will understand how things work in the Forex market. Even if you make mistakes, you will not lose money. That’s the best thing in demo trading. Nevertheless, do you think demo account is as realistic everyone says?