Trading on a demo account for FX:EURUSD by Lingrid — TradingView (2024)

Sep 2, 2022Hello everyone!

Today I want to discuss a topic that worries everyone: to trade or not to trade on a demo account.
The demo account itself is a useful tool, but it also has a couple of disadvantages.
Let's deal with everything in order.

Advantages of a demo account
Perhaps the most important plus is that you do not need to deposit your money into the account.
The demo account is created for training, and you can use it for free! There are no risks and you will not lose your money.
The ability to test your strategies. Thanks to a demo account, you can try to trade your strategy in real time on a real market and understand whether it works or not and whether you are able to follow the rules.
The experience is priceless, and you can get it thanks to a demo account. You can open demo accounts as much as you want and trade all day long, filling your hand on the real market.
Thanks to the demo account, you can try all the free indicators and understand which ones are suitable for you and which ones do not work at all.

Disadvantages of a demo account
Perhaps the most important disadvantage is that you will definitely behave differently than on a real account. Psychology is not to do anywhere and when trading for real money, you will immediately notice it. There is no tension on demo accounts, because you will not lose your money, but as soon as the question concerns your real money, you lose your head.
In addition, transactions are executed instantly on a demo account, this is not always possible on a real account, because there is slippage. Because of this, strategies that were profitable on a demo account may be unprofitable on a real one.
On demo accounts, traders choose the maximum deposit and trade the maximum lots. With an infinite deposit, it's hard to lose all the money. In real trading, the account is usually always smaller and therefore you need to trade a smaller lot, which is not so easy.
Spread. A narrow spread on a demo account is a feature of brokers trying to attract as many clients as possible. In real trading, this parameter will be wider.
The number of transactions. On demo accounts, traders tend to execute a much larger number of orders than they actually need. This habit is transferred to real money. But it is much more important to approach the evaluation of each transaction carefully and chase not the number of orders, but their quality.

Conclusion
A demo account is certainly a very useful tool for a trader.
But you need to approach the matter wisely and understand the difference between a demo and a real account.
Practice trading on a demo account the same way as if you were managing real money and then the benefits will be much greater.

Good luck!

Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻