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Is Forex trading with a demo account worth it?

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Most newcomers to the industry of Forex trading prefer trying out trading platforms and learning the basics of trading without spending a single dollar. They resort to the use of demo accounts, which contain a certain amount of special virtual currency that has no real value. Is this the best way to learn how trading works for rookies? Read this article to find it out.

Practical benefits of demo accounts

If you are a beginner, the presence of a demo account may come in handy for the following reasons:

  1. You can get the understanding of what any trading platform looks like. If it seems to you that screenshots and video reviews of some digital products provide insufficient data, then the best way to get acquainted with the interface and design of a certain trading platform is to create a demo account.
  2. You don’t risk anything. Demo account is completely free and allows you to buy and sell currencies or open and exit trades without any fear. This way, you can easily take risks and make responsible decisions.
  3. You have the opportunity to try out new strategies. If you are already into trading and have just found a new technique, which you are curious about, it is worth switching to a demo account and testing if this strategy is valid and profitable.
  4. You can understand the mechanics of trading. This means that a demo account allows you to get used to opening deals and objectively analysing the situation on the market.

Drawbacks of demo accounts


1. If you mainly use a demo account on your first trades, it may slow down your further development, because:
Some developers of trading platforms artificially increase the likelihood of successful trade. This dirty trick easily lures novices and encourages them to deposit some money immediately. Of course, most time-tested services like MetaTrader 4 provide users with realistic demo accounts, which have the same opportunities for profit. However, lesser-known companies may still resort to these unfair methods.

2. You don’t feel the emotions that arise during real trading. This aspect is a huge drawback, as you can’t take demo trading seriously. As a result, when you decide to switch to a real account, you become afraid of entering trades and managing your balance.

3. Using the whole balance may become a habit. When you are trading with the demo account, nothing stops you from spending all the virtual currency available. If this statement refers to you, then you should be especially careful when moving to an account with a real balance. Remember that making use of all your budget at once is too risky and irrational even though some rookies may find this strategy the most profitable.

Should you create a demo account?

Considering all the pros and cons, we can state that a demo account is quite a useful thing for complete beginners. If you want to understand if trading suits you or check the design and features of a certain tool, then an account with a fictional non-valuable currency will help you out. However, we would recommend studying the basics of trading with a small budget that you are not afraid to lose. This way, you will get real emotions during the process, be sure that you have real chances of getting profit and have the opportunity to fully use all the available features.