Downside to Demo Accounts
Posted: Sat Oct 10, 2015 4:01 am
Demo trading may cause you to develop certain risk-loving behaviors that will surely ruin your live account in no time. It all comes down to trading psychology. Top Forex brokers will try to caution you against putting too much faith in trading results achieved with a demo account, mostly because such achievements are emotion-free. Since you don't risk real money in a Forex demo account, even with the best Forex trading platform, your results won't be reflective of what you could achieve under similar circumstances with a live trading account. Live trading brings emotional factors of greed and fear, which one must learn to control through experience. This is why we suggest that once you test-drive your Forex broker and gain some initial trading experience with a demo account, you open a live account with a minimum possible deposit, and move on with live trades with absolute minimum trade size, which is generally 0.01 lot in online Forex trading. Some of the best ECN Forex brokers accept initial deposit of as little as $100. Don't expect to turn it into a million dollars. You may lose a small amount of money this way, but the most you risk here is a small investment that will go a long way in helping you not only master your emotions, but also test the reliability and transparency of your Forex broker.