DEMO ACCOUNTS
The majority of brokers provide demo accounts to let you try out their exclusive platforms with virtual money utilizing market statistics. This account type would help you practice on how to trade. Train yourself by pressing buttons and play around the platform to get the feel of it.
ADVANTAGES AND DISADVANTAGES
A demo account would enable you to practice your capabilities without spending real funds. If you commit a mistake, you won’t forfeit anything. It sounds appealing but there will be challenges. First, demo accounts grants a large sum of virtual money for practice. A trader can decide any amount but, some often choose more than they would trade with. They make more money for mistakes but, on the live account, they won’t have funds to lose. Furthermore, with a large capital, traders won’t know real casualties as they are restored easily by a big investment rather than a small one.
Another necessary drawback of a demo account is the need for true emotions. You’re fearless when you’re losing nothing. Fear affects the trader’s attitude, and not everyone can manage their emotions. Therefore, it would be useless to practice your skills when you don’t know how to handle stress.
When should you use a demo account?
1. If you’re a beginner and have no idea how to use a trading platform. A demo account would support you in learning its features and prevent unintentional trades.
2. To test out a new strategy. You apply it in a chart and observe if it could perform beneficial trades. If it turns out well, then you can use it in your live account.
3. You can use the demo account for testing automated trading as well. It’s run by a robot or an expert advisor that is not influenced by emotions.
Lastly, we can declare that a demo account is excellent for training. You can try out strategies without risking money, but you should also bear in mind about its weakness. Read Forex Copy Trading in India to learn more.
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