Expert Opinions on If It Is Worth It to Trade on Demo Account
Entering foreign stocks is not only a unique chance to increase your monthly budget but also a difficult task. It requires a high level of expertise, both theoretical and practical. While the necessary competencies come from books, video tutorials, and online courses, the experience comes only after years of making successful transactions. Therefore, novice traders use a special Forex simulator, also called a demo account.
The Idea of Demo Mode
Trading in demo mode operates under the same principles as the real one. After opening it, newcomers gain access to the financial market, observe the existing quotes, and monitor their changes. They can make operations on virtual money with the rest of the participants. They calculate profit and loss, but the main advantage of the simulation is that you don’t lose your own money. However, you won’t make money either.
Thanks to the training mode, the newcomers learn the basic techniques, how to place and close orders, determine the optimal lot size, and define the purpose of tools and indicators. Thus, such a simulator allows you to perform all actions automatically so that in the future you can make them quickly and without errors.
Difference Between Demo and Real Accounts
Many people who first find themselves in the stock market and lose their deposits are interested in what is the difference between demo and real accounts. Here are some suggestions:
- The psychological factor: it is difficult to realize that all operations are not a simulation and the losses are also real.
- Not everyone is able to adequately trade, having a large sum on the account. In such situations, it is recommended to start from the amount of money that is not a pity to lose.
- In the training mode, all operations with orders are carried out automatically.
- Not all companies are fair and transparent.
- The quality of the opening and closing deals is different.
Why You Still Need to Open a Demo Account
Considering all the pros and cons of both options, it is still better to use a simulator. The main reason is that it is possible not to risk your own money while studying. It will definitely help to get on your feet. If at first, the profit will be virtual, then the loss of the deposit, fortunately, too.
There are also certain rules that should be followed by novice traders:
- When opening an account, especially for large amounts, you need to replenish it only via bank;
- Before you sign a contract with a brokerage company that has legal force, you must carefully read it;
- You have to select an intermediary carefully, having studied all the reviews about it.
Finally, you need to act step-by-step, moving to real activity without rushing. By studying in the training mode, making successful transactions, and investing small amounts, the newcomer will find out how to increase his capital.