Everyone mainly defends their own interests in the market. That is why traders have to learn only from their own mistakes. Luckily, there is a demo account that can make it easier for the trader to take first steps in trading.
The key feature of a demo account is training. That is why a demo account is also known as a simulator, a gaming account, a practice field, and a rehearsal deposit. Indeed, there are many definitions, but the essence is the same. A demo account teaches trading so that beginners can dive into the market.
Let us take a closer look at its main functions:
it offers insight into the important aspects of the market and a trading terminal
it helps traders learn how to use financial instruments in trading
it improves technical skills so that the trader does not waste a lot of time during online trading
it helps traders test and develop a perfect trading strategy
it helps traders learn the basics of money management in order to effectively manage the capital
it broadens traders’ experience, making them feel confident in the market
it teaches traders to control their emotions
The greatest advantage of demo trading is that it carries absolutely no risks of losing money. Beginners can test any methods, techniques, or strategies, being sure that they do not risk their money. Unlike a live account, a demo one does not require replenishment even to carry out a trade. In this case, newbies trade with virtual funds, meaning they cannot yield actual profits. Thus, they do not risk losing their capital.
Meanwhile, demo trading conditions are the same as real market conditions. Traders can monitor quotes and use the row of all trading instruments. Using the simulator, they gain knowledge of interface and a trading platform. A demo account teaches traders to conduct analyses, make forecasts, draw charts, open and close trades, while moving in sync with the market. It provides traders with in-depth information about pending orders and helps them assess all pros and cons of high leverage trading without risking their capital.
In addition, when opening a demo account, traders always have an opportunity to choose the deposit size. Thus, they can train using a particular amount of money. Market players can monitor their margin with the so-called Demo points needed to carry out a trade in their Client Area. Traders can get access to their Client Area after passing registration that takes just 3 minutes.
You can open a demo account on a broker’s website or download the trading platform you are going to use. Besides, within one platform, you can switch from the demo account to a live one with only a few clicks. All you need to do is to make a deposit and use a special switch button in your Client Area. You can also return to a demo account if you realize that you have rushed your decision to switch to online trading or if you want to test any trading method one more time.
So, when is the right time to switch from a demo account to real-time trading? Unfortunately, there is no correct answer to this question. Here, everything depends on a person. Some traders gain experience quickly, but it takes others much longer to develop skills needed to reap stable profits and control their emotions.
According to professional traders, you should assess the effectiveness of your trading strategy at all stages of the market in order to find out that you are ready to switch from a demo platform. If you make profits in your demo account for 2-3 months, you can try online trading but remember about tight emotional control and strict adherence to the chosen strategy. Conversely, if you see that you cannot earn money using a demo account, do not even try to switch to the live one. Your best option in this case is to keep practicing and optimizing your trading strategy until you start generating a stable income.
One more important signal that you are ready to leave your comfort zone is complete peace of mind whenever you enter the market. If there is nothing that can bring you down and you always follow your own rules under any circumstances, then welcome to the world of online trading.
Despite all the advantages of a demo account, market players should not use it for a long time. Clearly, adapting to the market will be challenging for beginners at first. But getting used to demo trading is even riskier:
Prolonged trading with virtual money and the lack of emotional pressure can be very relaxing. Traders do not feel responsible for their portfolios. They become self-reliant and are not afraid of risking large amounts of money.
Successful demo trading can be deceiving. Traders can get used to knowing that they can open positions quickly and easily, which is not always true in the market. They can no longer place a Stop Loss order and start trading not fearing knowingly dubious positions.
Of course, real-time trading will bring beginners down to earth when they lose their capital. That is why, those using a demo account should always remember that when they switch to online trading they must play by the strict rules of money, risk, and emotional management.
The key feature of a demo account is training. That is why a demo account is also known as a simulator, a gaming account, a practice field, and a rehearsal deposit. Indeed, there are many definitions, but the essence is the same. A demo account teaches trading so that beginners can dive into the market.
Let us take a closer look at its main functions:
it offers insight into the important aspects of the market and a trading terminal
it helps traders learn how to use financial instruments in trading
it improves technical skills so that the trader does not waste a lot of time during online trading
it helps traders test and develop a perfect trading strategy
it helps traders learn the basics of money management in order to effectively manage the capital
it broadens traders’ experience, making them feel confident in the market
it teaches traders to control their emotions
The greatest advantage of demo trading is that it carries absolutely no risks of losing money. Beginners can test any methods, techniques, or strategies, being sure that they do not risk their money. Unlike a live account, a demo one does not require replenishment even to carry out a trade. In this case, newbies trade with virtual funds, meaning they cannot yield actual profits. Thus, they do not risk losing their capital.
Meanwhile, demo trading conditions are the same as real market conditions. Traders can monitor quotes and use the row of all trading instruments. Using the simulator, they gain knowledge of interface and a trading platform. A demo account teaches traders to conduct analyses, make forecasts, draw charts, open and close trades, while moving in sync with the market. It provides traders with in-depth information about pending orders and helps them assess all pros and cons of high leverage trading without risking their capital.
In addition, when opening a demo account, traders always have an opportunity to choose the deposit size. Thus, they can train using a particular amount of money. Market players can monitor their margin with the so-called Demo points needed to carry out a trade in their Client Area. Traders can get access to their Client Area after passing registration that takes just 3 minutes.
You can open a demo account on a broker’s website or download the trading platform you are going to use. Besides, within one platform, you can switch from the demo account to a live one with only a few clicks. All you need to do is to make a deposit and use a special switch button in your Client Area. You can also return to a demo account if you realize that you have rushed your decision to switch to online trading or if you want to test any trading method one more time.
So, when is the right time to switch from a demo account to real-time trading? Unfortunately, there is no correct answer to this question. Here, everything depends on a person. Some traders gain experience quickly, but it takes others much longer to develop skills needed to reap stable profits and control their emotions.
According to professional traders, you should assess the effectiveness of your trading strategy at all stages of the market in order to find out that you are ready to switch from a demo platform. If you make profits in your demo account for 2-3 months, you can try online trading but remember about tight emotional control and strict adherence to the chosen strategy. Conversely, if you see that you cannot earn money using a demo account, do not even try to switch to the live one. Your best option in this case is to keep practicing and optimizing your trading strategy until you start generating a stable income.
One more important signal that you are ready to leave your comfort zone is complete peace of mind whenever you enter the market. If there is nothing that can bring you down and you always follow your own rules under any circumstances, then welcome to the world of online trading.
Despite all the advantages of a demo account, market players should not use it for a long time. Clearly, adapting to the market will be challenging for beginners at first. But getting used to demo trading is even riskier:
Prolonged trading with virtual money and the lack of emotional pressure can be very relaxing. Traders do not feel responsible for their portfolios. They become self-reliant and are not afraid of risking large amounts of money.
Successful demo trading can be deceiving. Traders can get used to knowing that they can open positions quickly and easily, which is not always true in the market. They can no longer place a Stop Loss order and start trading not fearing knowingly dubious positions.
Of course, real-time trading will bring beginners down to earth when they lose their capital. That is why, those using a demo account should always remember that when they switch to online trading they must play by the strict rules of money, risk, and emotional management.
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