By Euro Weekly News Media • Published: 09 Feb 2021 • 13:12
Forex trading accounts are usually divided into two main categories – live and demo accounts. Live accounts are used for the actual trading with actual money, however, many beginners are wary of going straight into opening one. Thus, demo accounts exist to allow traders to practice their skills and acquire additional knowledge without having to risk their hard-earned funds.
Although a demo account may seem like a good option for those who are only beginning their journey towards the career of a successful Forex trader, it may not be for everyone. To help you determine whether or not you need a demo account for trading, we have drawn out a comprehensive list of the main advantages and disadvantages of using one. Pros:
Cons: As for the disadvantages of using a demo account, professional traders usually reference one specific shortcoming – a demo account cannot be a full substitute for the actual trading with real money. Unfortunately, a demo account, no matter how realistic it is, cannot account for some of the major factors that can have a significant impact on the success of your real trading sessions. A good example of that would be the emotional state of the trader, which is almost impossible to replicate when you are trading with refillable, virtual money.
Overall, a demo account is very useful, however, a lot will depend on the way you approach it. The best way to do it would be to treat it the same way as you would treat the actual account. In doing that, you should try and use smaller sizes of the deposits, to keep the overall experience as realistic as possible. This way you will also be able to avoid high risks and impulsive trading, which is not likely to occur when your actual money is at risk. Moreover, it is recommended that you come up with a certain trading plan for your demo account and stick to it. This way, you will be able to monitor your progress, and move on to the live account once all of the objectives that you set out for yourself are achieved.
Share this story
Subscribe to our Euro Weekly News alerts to get the latest stories into your inbox!
By signing up, you will create a Euro Weekly News account if you don't already have one. Review our Privacy Policy for more information about our privacy practices.
Share your story with us by emailing newsdesk@euroweeklynews.com, by calling +34 951 38 61 61 or by messaging our Facebook page www.facebook.com/EuroWeeklyNews
By signing up, you will create a Euro Weekly News account if you don’t already have one. Review our Privacy Policy for more information about our privacy practices.
Download our media pack in either English or Spanish.