Tag: Demo Account

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Forex Basics

Do You Know the Pros and Cons of Using a Demo Account?

A demo account allows forex traders to become more acquainted with a trading platform and to practice their skills and strategies in a live environment. Since demo accounts use virtual currency instead of real money, traders can use these accounts without taking any financial risk. There are several reasons why beginners and even advanced traders […]

A demo account allows forex traders to become more acquainted with a trading platform and to practice their skills and strategies in a live environment. Since demo accounts use virtual currency instead of real money, traders can use these accounts without taking any financial risk. There are several reasons why beginners and even advanced traders […]

A demo account allows forex traders to become more acquainted with a trading platform and to practice their skills and strategies in a live environment. Since demo accounts use virtual currency instead of real money, traders can use these accounts without taking any financial risk. There are several reasons why beginners and even advanced traders can benefit from these accounts, but there are also some cons that come from trading on them. Below, we will outline both the benefits and disadvantages of demo accounts.

Pros

Demo accounts are great for practice. You can take more risks than you would on a live account and more experienced traders can even use them to practice different strategies. Beginners can track their progress and have a better idea of when they are prepared to make a real investment. You can do all the research you want, but nothing is as practical as trading hands-on with a demo account.

They’re free: Most forex brokers offer demo accounts and it should never cost anything to open one. The reason why brokers provide these free services is that they want their potential clients to come into the market better prepared. Traders are less likely to blow their accounts and give up quickly if they have some practical experience. You’re also more likely to open a real account through the same broker that has provided your demo account, so this is a way for companies to gain future clients. 

You can use them to practice different strategies: The internet is filled with information about different kinds of trading strategies. Some prefer scalping, while others take to swing trading, and there are a whole host of other options out there. You might read an article or watch a video about a strategy you’ve never tested and think that it sounds promising. A demo account is useful in this situation because you can test the new strategy without risking real money.

Opening one is quick and easy: The process of opening a demo account does not involve a headache. Brokers don’t ask for nearly as much information as they would if one were opening a live account. Most require your name, email address, and possibly country. Every now and then you might need to provide a phone number, but not always. One can fill in an account opening form and receive their login details in just a couple of minutes. 

You can use them to test indicators: An indicator signals the best times to enter the market and is helpful when used correctly. Some indicators are available for free, but many providers might ask you to pay for them. The issue is that you never know for sure if the indicator is going to work effectively as many of them can give off false signals or experience other faults. This is why most traders test out promising indicators on demo accounts to see if they are worth investing in.

Demo accounts rarely expire: Most brokers will allow you to trade on your demo account indefinitely. Every once and a while, a brokerage might set a 30-day expiration date or cut off access to that account after so many days of inactivity. If you reach out to support, many brokers will allow you to keep using the same account. If not, you can always open a new demo account in a couple of minutes for free, so you can practice for as long as you want without being forced into opening a live account if you aren’t ready. 

Cons

Demo accounts don’t prepare traders for the emotions related to live trading: When real money is on the line, we can get overly emotional. If you lose big, you might feel a lot of grief or beat yourself up over it. If you’re winning, you’re likely to feel excited, which can lead to other trading problems. Trading psychology is a whole other matter in itself, but it is important to know that demo accounts can’t prepare you for those feelings because real money isn’t on the line. These emotions can come as a shock to traders that aren’t expecting them.

Demo accounts don’t experience delays or slippage: On a live account, traders might see slippage in times of high market volatility or when important finance related news breaks. Slow internet connections can also cause issues with re-quotes. Everything happens faster on a demo account, so traders might not realize that these problems can occur once they switch to a live account.

You might become too used to using a demo account: Some traders never make the switch to a live account for whatever reason, even with good demo trading results. Perhaps they lose interest in trading or don’t want to make a real investment. The issue is that some traders just become too comfortable on the demo account and they continue to trade on it for an extended period of time. If those traders ever do open a live account, they will be more relaxed because of their altered expectations.

Traders handle money differently on a demo account. Sure, you might take your results seriously, but you won’t always make the same moves when real money is involved. What seems like a good move on a demo account might seem too risky if real money is on the line. This can alter one’s perception and change their results on a live account. Another downside is that many demo accounts start you off with an unrealistic amount of money, which also changes the way you trade. 

Final Thoughts

Demo accounts offer several obvious advantages. One can sign up for them easily through most brokers without paying a dime. The accounts can be used to become more familiar with forex trading and to gain practice using different strategies, leverages, account types, indicators, and so on. However, demo accounts do present some dangers that aren’t as well-known. Traders don’t experience the same raw emotions or fear losing money in the same ways when they know that real money isn’t at risk. They also might not realize how re-quotes, slippage, and delayed execution can affect them in a real environment.

When traders aren’t aware of these issues, they might be too relaxed once they start trading on a live account. Those traders are then likely to incur losses because their expectations are off, and this could even cause them to walk away from trading for good. Despite the disadvantages, we highly suggest opening a demo account and taking advantage of their many perks. Traders simply need to be aware of the dangers involved and ensure that they are prepared to deal with the differences once they open a real account.

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Forex Basics

Forex Demo Account Vs. Live Account: Similarities and Differences

Forex brokers usually offer two main types of trading accounts: demo and live accounts. Although the accounts are very similar in some respects, there are also a few key differences that traders need to recognize. We will start by outlining what qualifies an account as being live or a demo. 

Forex brokers usually offer two main types of trading accounts: demo and live accounts. Although the accounts are very similar in some respects, there are also a few key differences that traders need to recognize. We will start by outlining what qualifies an account as being live or a demo. 

Forex brokers usually offer two main types of trading accounts: demo and live accounts. Although the accounts are very similar in some respects, there are also a few key differences that traders need to recognize. We will start by outlining what qualifies an account as being live or a demo. 

  • A live account is a real trading account that one opens through a broker. You invest real money into this account. A broker might offer several different types of live accounts, which include but are not limited to Micro, Cent, Standard, Classic, Premium, VIP, etc. Traders then trade in a real environment and either profit with the option to withdraw their funds, or they lose their investment.
  • A demo account can also be opened through a broker and it allows one to trade with fake, virtual currency in a live simulation environment. These accounts are used for practice and one does not invest any real money or make a real profit from them. 

If you’ve never opened a real account before, starting with a demo account can help provide the opportunity to practice in a real environment with zero risks. These accounts are offered by most brokers, but you should know that a few brokers out there don’t offer demo accounts. If your current broker or one you’re considering doesn’t have demo accounts, then a quick Google search will help you find several free options. Opening a demo account should always be 100% free through any broker.

Once you get started, a demo account can serve several helpful purposes. It can help you become more acquainted with a trading platform, practice different strategies, try out different leverages and settings, and see how far you’ve progressed towards being ready to open a live account and make a real investment. However, it is important for traders to know that there are some differences between demo and live accounts so that they do not have a bad experience when they inevitably switch from a practice account to a real account. These are the main differences that every trader should be aware of:

  • Since demo accounts involve virtual money, traders aren’t subjected to the emotions they would feel in a live trading account. Losing $100 on a demo account will not make you sick but losing it on a real account might be a different story. Anxiety, greed, excitement, and other emotions will be present once you switch over to a live account. Remember that making decisions based on emotion should be avoided, otherwise your trades will suffer. 
  • Demo accounts do not see slippage, requotes, delays, or other unexpected situations that might affect a real account. Slippage is a common example where there is a delay between the quoted price and the execution of the order. These types of events are more likely to occur when market volatility is high, but they won’t affect you on a demo account, so you need to be aware of them once you move on to a live account.
  • Execution speed is important when you’re trading on a live account. If you have a problem with your internet connection or a power outage, you could lose real money. Everything happens faster on a demo account, while the speed of your connection will directly affect your orders on a live account.

Demo accounts offer a lot of perks. They can help one to become more acquainted with trading and offer an opportunity for practicing basic skills and more advanced concepts without the fear of losing real money. While demo accounts are mostly useful, traders do need to remember that there can be problems with delayed order execution in times or high volatility or because of events like power outages or slow internet connection speeds. Another major fault with demo accounts is the fact that they cannot prepare one for the rollercoaster of emotions that come with trading on a live account.

Since demo accounts are free practice tools, there is no reason not to test one out before moving on to a live account. However, traders need to remember the ways in which demo accounts differ from live accounts so that they are better prepared to deal with those issues without losing money because of altered expectations. 

 

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Forex Basics

Exploring the Psychological Differences Between Demo and Live Accounts

Opening a demo account is an important first step to becoming a trader, as it allows one to practice trading in a simulated environment without risking real money. While trading on a demo, traders can become more acquainted with a trading platform, practice different strategies, gauge their preparedness to move on to a live account, […]

Opening a demo account is an important first step to becoming a trader, as it allows one to practice trading in a simulated environment without risking real money. While trading on a demo, traders can become more acquainted with a trading platform, practice different strategies, gauge their preparedness to move on to a live account, […]

Opening a demo account is an important first step to becoming a trader, as it allows one to practice trading in a simulated environment without risking real money. While trading on a demo, traders can become more acquainted with a trading platform, practice different strategies, gauge their preparedness to move on to a live account, and so on, which is why demo accounts are often recommended as one of the best free hands-on tools for beginning forex traders.

While these accounts offer many benefits, there are some psychological differences between the simulated and real accounts that beginners might not realize. Understanding these differences is important so that it doesn’t catch you off guard and cause you to lose money when you decide to move on to a real account. 

Difference #1: Emotion

When you’re trading on a demo account, you use virtual money, meaning there are no consequences. If you take your demo results very seriously, you might care a little when you lose, but this still doesn’t compare to the way you’ll feel when real money is on the line. Once you could really lose your hard-earned money, you might become anxious, paranoid, or fearful. When you’re winning, emotions like overconfidence can lead to problems like overtrading. The best way to prepare yourself for this is to start by reading up on trading psychology so that you will more easily recognize it if your emotions begin to interfere with your trading decisions. 

Difference #2: It’s More Difficult to Stick with Your Plan on a Real Account

On your demo account, it will be easy to stick with your plan because you know that real money isn’t on the line and you need to know if the plan actually works. Once you move over to a live account, you’ll be more tempted to deviate from your plan and commit trading “sins”, like moving your stop loss, cutting off winning trades early due to anxiety, or revenge trading. 

Difference #3: The Reset Button

If you don’t like the results you’re getting on your demo, it’s easy to simply create a new one and start fresh. If you run out of funds, support might also be willing to top up your account with more funds. Knowing that you have the ability to start over without consequences can provide a sense of comfort because there isn’t aren’t any real repercussions. Things are much more different on a live account, however, where a blown account balance might be enough to make one want to end their career. Otherwise, you’ll have to pull more money out of your pocket to keep going. There is no reset button when it’s real and that can take away from one’s sense of safety. 

 

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Forex Basics

Signs that You’re Ready to Open a Live Account

Have you been considering the benefits of becoming a forex trader lately? Perhaps you’ve heard stories from close friends or family members about the success that it has brought them, or you might have stumbled upon trading articles online that inspire you to try it. Daydreaming about becoming a successful forex trader is one thing, […]

Have you been considering the benefits of becoming a forex trader lately? Perhaps you’ve heard stories from close friends or family members about the success that it has brought them, or you might have stumbled upon trading articles online that inspire you to try it. Daydreaming about becoming a successful forex trader is one thing, […]

Have you been considering the benefits of becoming a forex trader lately? Perhaps you’ve heard stories from close friends or family members about the success that it has brought them, or you might have stumbled upon trading articles online that inspire you to try it. Daydreaming about becoming a successful forex trader is one thing, but many of us find that actually opening a live account is another. After all, you might be wondering if you’re truly ready or you could be having a tough time committing to making that initial investment. Don’t worry though – we’re here to tell you if you’re ready, or if you need to spend more time preparing so that you’re more likely to be successful.

Sign #1: Your Demo Results Say Yes

If you’re truly considering switching to a live account, we hope you’ve been practicing on your demo account first. If you don’t even know what that is, you should know that demo accounts are hands-on tools that are offered for free by most forex brokers. These accounts allow you to trade in a live environment while using fake currency so you’re not at any financial risk. Beginners can really learn the ropes by using these accounts because they will allow you to become acquainted with the mechanical aspects of trading, like working a platform or entering trades, exiting, and so on, you can test different strategies with them, and can still benefit from using them later on. If you haven’t signed up for a demo account yet, this is where you should start.

On the other hand, if you’ve already opened your demo account and you’ve been trading on it for a while, your next step is to analyze your performance. A good indicator that you’re ready to move on would be consistent profits with noticeable improvement since you first started. This doesn’t mean you have to win every single trade you’ve entered, but you should be able to tell that you’re improving as a trader and that you would be making profits on a live account rather than losing money. If you’re not quite there yet, don’t jump the gun and open a live account yet. Instead, spend some more time practicing.

Sign #2: You Have a Risk-Management Plan

It’s been said that 50% of your trading success depends on your risk-management plan. To be clear, this defines the way that you plan on reducing the overall amount of money you risk when trading. You’ll want to consider how much you’re willing to risk on each trade for starters, as some beginners make the mistake of risking way too much at first, which leads to a blown account. Some experts recommend limiting your risk to 1-2% of your account balance per trade, while others suggest that it’s better to analyze each individual trade to decide how much to risk based on the chances of that trade being successful.

You’ll also want to employ stop losses to ensure that you don’t lose too much on your trades if the market moves against you. If you’re already considered different risk-management strategies and you have the answers to these questions, then you might be ready to move on. Otherwise, you should spend more time developing your risk-management plan to ensure that you don’t lose a lot of money in the beginning. 

Sign #3: You Can Handle Losses

This one might be a little harder to answer considering that your only experience so far likely comes from a demo account. This is because those that are trading on a demo don’t have any real money at risk, so they are less likely to succumb to the emotional aspect of trading. Still, traders should take their demo results seriously, so you’re still likely to feel a little sting when you lose. Try to think of the way you feel when you do lose on the demo account and how you might feel if you had actually lost that money in real life. If you think you could handle it calmly, you’re probably ready to move on. 

Sign #4: You’ve Invested Time into Choosing the Right Broker

What broker do you plan on using? Some might already have a broker in mind or plan to open a live account through the broker they’ve been using for demo trading. If you do plan to use the broker you’ve been demo trading through, you will already have an idea of what their conditions are like, but there is more left to consider. For example, do you know anything about the funding options offered or how much will be taken in fees when you withdraw money? Some brokers will allow you to withdraw for free, while others charge fees upwards of 7%.

Think about the difference that will make in your profits. What about hidden charges, such as inactivity or maintenance fees? Before making a final decision, you need to go over everything on the broker’s website, including their terms and conditions, or else you could find some nasty surprises later on. Truly researching any broker you plan on choosing is the last sign that you’re ready to put in the effort and make the observations required of you as a true forex trader. 

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Forex Basics

How (and Why) to Take your Forex Demo Account Seriously

For any aspiring forex trader, a demo account is one of the best hands-on tools available. These accounts allow one to really become acquainted with the market and their chosen trading platform in the beginning, and can even be used to test strategies later on. While demo accounts can provide a good idea of whether […]

For any aspiring forex trader, a demo account is one of the best hands-on tools available. These accounts allow one to really become acquainted with the market and their chosen trading platform in the beginning, and can even be used to test strategies later on. While demo accounts can provide a good idea of whether […]

For any aspiring forex trader, a demo account is one of the best hands-on tools available. These accounts allow one to really become acquainted with the market and their chosen trading platform in the beginning, and can even be used to test strategies later on. While demo accounts can provide a good idea of whether one is ready to open a real account or give a general idea of how well a new strategy will work, they do come with one major fault in that some people just don’t take them seriously. After all, you’re only trading with fake money, so the psychological aspects that come up when real money is on the line are absent.

It’s also easy to become disillusioned with trading on the demo account after some time, as some traders begin to question whether it is even worth their time. It’s important to remember that demo accounts are one of the best tools available, as long as they are taken seriously. 

The first thing you can do to gain every potential reward from your demo account is to make yourself feel the pain when you lose money. As we mentioned, one of the downfalls of the demo is that there is no real money on the line and the trader has nothing at stake. It’s easy to open a new demo if you blow your old one or to ask support to top up the account, whereas the same can’t be said when you’re trading with your real hard-earned money. If you want to make things feel more realistic, try introducing real-world punishments for mistakes or losses taken on your demo account.

If you deviate from your trading plan, force yourself to do 25 push-ups. If you take a loss that could have been avoided, make yourself do a chore that you’re dreading. Or you could take things away from yourself, like dessert. If you know that there are going to be real consequences, your mind will be more focused on your demo account and you will put in every effort, just as you would on a live account.

Another suggestion to help yourself take your demo account seriously is to grade yourself. For some, seeing a high grade can make them feel more motivated and successful. Your grade also gives a general impression of how you’re doing, as you obviously need improvement if you’re coming out with a low grade. You can use a scale of 1 to 10 or go with a scale from 0 to 100, whichever works best for you personally.

When grading yourself, you’ll want to come up with your own system to base the final grade off to avoid self-biased results. Adhering to your trading strategy, managing risk, missed trades, the number of trades you’ve taken, and profits/losses are a few examples of things you could critique. 

Although demo accounts offer many benefits, some traders have issues taking their demo trading seriously because there isn’t any real money at stake. Our advice is to introduce real punishments when you have bad demo results and to grade yourself so that you can keep track of your progress. Knowing that you’ll have to clean your house or forgo that piece of cake you’ve been wanting for dessert can be motivating enough to help you trade more seriously while having a final grade to look at will give you a general idea of how your doing, as well as something you can work to improve. If you learn to take your demo account seriously, you’ll reap the many benefits offered by the free simulation tool.

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Forex Basics

Making the Switch from a Demo Account to Live Account

One of the most important things to keep in mind is that trading a real account is very different from a demo account, at least from a psychological point of view. Changing a demo account to a real account is a relatively simple process. Depending on your broker, it can be as easy as clicking on a web page several times to fund an account and then start trading live.

One of the most important things to keep in mind is that trading a real account is very different from a demo account, at least from a psychological point of view. Changing a demo account to a real account is a relatively simple process. Depending on your broker, it can be as easy as clicking on a web page several times to fund an account and then start trading live.

One of the most important things to keep in mind is that trading a real account is very different from a demo account, at least from a psychological point of view. Changing a demo account to a real account is a relatively simple process. Depending on your broker, it can be as easy as clicking on a web page several times to fund an account and then start trading live.

As a last resort, most of the brokers are trying to reach do live trading, and the demo account is the first part of the process to accept a new customer. After all, you are now starting to lose money and that is much more painful than being wrong in a trade. If you’re wrong on a demo account, your pride is at stake. If you’re wrong on a real account, your pride and your money are on the line.

Documentation

When you are ready to open a real account, you will need to facilitate a certain amount of documentation. In general, you are usually offered a real account only after you can prove your identity, residence, and any other legal document required for the regulatory entity with which the broker must deal. In general, you’re seeing some kind of government identification and some kind of utility bill from the address you live at. Beyond that, there will be some legal documents to sign that will be provided by the firm’s attorneys.

There will probably be some code of conduct agreement as well as even more if there is a social trading platform. Obviously, this will differ from Broker to Broker, but in general, these are the “rings” that will go through.

Funds

Financing will vary from Broker to Broker, but most of them will accept bank transfers, checks, and various types of electronic payments such as Paypal, Skrill, and many others. It is the part of financing that proof of identity is so important for brokers, as there are strict international laws against money laundering that brokerage accounts used to be used against. Financing can take only a few minutes, or a couple of days, depending on the broker’s administrative speed and the completed form.

The Psychology

The psychology of going live is a bit of a mix. Initially, it is an exciting time to be a trader because it suddenly becomes “real”. But fear also becomes a serious problem. Suddenly, losing does matter and you’ll realize that you feel much less comfortable when you operate on paper. The psychological part of trading is certainly the most difficult, but it is also the most important. It is your psychology that will help you through difficult times and keep you grounded during high times. I cannot stress this enough: its success lies within the realm of psychology and, of course, also of money management.

Administration of Funds

As mentioned above, money management is a big part of its success or failure. It really is true that random trading can generate profits if you use proper money management and psychology does not play against you. This is why many traders may have the same strategy as other traders and get completely different results. It’s about being able to keep your losses small and let your winners run. I know it’s a cliché, but it’s true, and that’s why you hear so much about it.

First, prove to yourself that you can win. One of the biggest mistakes I see that traders make is that they don’t succeed at demo trading initially before risking money. For that, it is supposed to be there a demo account, although I must admit that the vast majority of brokers use it as a commercial hook to increase their sales. Too many people are too excited about real-money trading to learn how to make long-term profits. Most brokers know this, so they have no problem giving away these free demo accounts because they know that it is very likely to go on the market long before it is profitable.

However, I ask you: “How can you expect to make money in the real world if you cannot do it in a simulated environment?” It’s a lot like allowing a doctor to practice in the real world who failed in medical school.

Too many people think they are going to enter the markets and carry out a massacre immediately, without understanding how difficult it is going to be profitable and successful in this effort. Actually, it can be a very rewarding race in which to participate, but you must take your time and be patient about the way the market moves.

Conclusion

Switching from demo to live account is relatively simple most of the time, but you need to have proper documentation. The real challenge comes down to doing it. If it is not profitable in a demo account, there is no way to do it in a real account. In fact, I can guarantee that you will end up losing your money. The average retail account is sold out in 90 days. Keep this in mind, but what I would say is that everything is avoidable, however, if you just take the time to learn how to trade, and only then do you start putting your money to work.

Categories
Forex Psychology

Psychological Differences Between Demo and Live Trading

When you start out trading, often the first bit of advice that is given to you is to use a demo account, keep using a demo account until you perfect your strategy. While this isn’t necessarily bad advice, it is, however, advice that can lead you into a sense of false confidence. Yes, we agree […]

When you start out trading, often the first bit of advice that is given to you is to use a demo account, keep using a demo account until you perfect your strategy. While this isn’t necessarily bad advice, it is, however, advice that can lead you into a sense of false confidence. Yes, we agree […]

When you start out trading, often the first bit of advice that is given to you is to use a demo account, keep using a demo account until you perfect your strategy. While this isn’t necessarily bad advice, it is, however, advice that can lead you into a sense of false confidence. Yes, we agree that using a demo account is great, to begin with, however, there are a few things that you should keep in mind for when you move over to a live account.

Reduction in Emotion

When you are trading on a demo account, there is nothing to lose, which means all of the stress that comes with a loss is not there, make a loss and you shrug it off, blow the account, just open up a new one and all that money is back. This isn’t how it will work on a real account, each and every loss is you losing something of yours, this can be devastating to some, we have seen people lost thousands, others have lost $10 yet it can have the same psychological effect on someone and can be hard to take. 

These negatives can cause a snowball effect and can cause some people to chase losses which can lead to more losses and even account closure and debts. It can also work for winning, your first winning trade on a demo account feels ok, but nothing special when you compare it to your first winning trade on a live account, it is a fantastic feeling, just don’t let it get into your head, stick to the strategy and you will have many more wins, don’t start trading just because you are on a high of the previous win.

The Need for Greed

If you were to ask someone if they are a greedy person, they will 90% of the time say no, watching someone trade is a good way to see the truth. We touched briefly on it in the previous post, but when you make a winning trade, that is actual money coming into your account, real money that you can withdraw and spend, it feels great, but I want more. Maybe I could get more by putting in trade here or there, obviously, these are not in line with my strategy but they could make me more money. My trade is going the wrong way, let me just move my stop loss further down so it doesn’t close because it will definitely turn. My trade is going the right way, let me move my take profit level higher so I can make a bit extra.

These are all things that we have done on a live account, but never ever think of doing it on a demo account, simply because we can make some money. These are not good habits to have, you set these initial trades or limits for a reason, stick with them, do not change them just because you think you could squeeze a little extra out of the markets, the markets will not be afraid to take it all back from you.

Risk Elimination

This works in a similar way to the emotions, there is no risk when trading on a demo account if you lose, you aren’t losing anything, but in the same way, if you win, you aren’t actually winning anything (apart from the knowledge of course). On a live account, seeing your balance going up or down can have a huge psychological impact, when it goes up, you are full of confidence and on a high, but when it goes down, it can really impact on your confidence and desire to continue learning.

So how do you avoid these sorts of things? It isn’t easy, any professional trader will tell you that, the hardest part of trading is taking out the emotion and sticking to your strategy, especially when things are starting to go wrong. Ensure that you are sticking to your plan, you created a strategy on the demo account, stick to the exact same on a live account, think of it as a process and try not to look at the profits, you could even hide them on your trading platform. 

Ensure that you are using a trading journal, both on the demo account and on the live account, this way you will continue to use what is working and will be able to see if you are changing anything fro the demo account, allowing you to stop and move back towards your strategy.

It is a big change going from demo to live trading, but ensuring that you are fully prepared and taking your time not to rush into things are the first steps in becoming a successful live trader.

Categories
Forex Basics

How to Make Real Money with a Forex Demo Account

A demo account serves as a simulation account that traders can use to practice trading in a live environment with virtual currency. Opening a demo account is completely free and you never have to invest a dime into the account, regardless of how many you open, what company you use, or how long you use it. These accounts are one of the best ways for traders to test their practical skills with zero financial risks. Since demo accounts are completely free, many traders would assume that there is no possible way to make money from them. The good news is that it is entirely possible to profit from trading on a demo account.

A demo account serves as a simulation account that traders can use to practice trading in a live environment with virtual currency. Opening a demo account is completely free and you never have to invest a dime into the account, regardless of how many you open, what company you use, or how long you use it. These accounts are one of the best ways for traders to test their practical skills with zero financial risks. Since demo accounts are completely free, many traders would assume that there is no possible way to make money from them. The good news is that it is entirely possible to profit from trading on a demo account.

A demo account serves as a simulation account that traders can use to practice trading in a live environment with virtual currency. Opening a demo account is completely free and you never have to invest a dime into the account, regardless of how many you open, what company you use, or how long you use it. These accounts are one of the best ways for traders to test their practical skills with zero financial risks. Since demo accounts are completely free, many traders would assume that there is no possible way to make money from them. The good news is that it is entirely possible to profit from trading on a demo account.

So, how can you make money off a demo account? Participating in a demo account contest. You might not have heard of this before because many brokerages don’t offer this. Those that cannot afford to offer bonuses and promotional opportunities often stay away from this type of contest because it doesn’t bring them any income and only takes money out of their pocket. However, it is possible to find several of these contests online through different companies. Do note that many of these brokerages require you to register a live account to take part in their contests. 

Each participating brokerage offers its own unique contest with different rules and prizes, but many of these contests follow the same pattern. Anyone that would like to can open a demo account through the broker and trade for a specified amount of time, usually around a month or so. When the time is up, the trader that made the most profit is usually crowned the winner and given the main cash prize. Sometimes second, third, and other placing traders will earn lesser prizes. 

If you are looking for an ongoing contest, you can search for “forex demo contest” on any search engine to find results. Some companies offer contests periodically while others offer them monthly. There are also cases where a demo contest is offered as a one-time promotion. It’s a good idea to check online for any updates periodically so that you don’t miss out on a good opportunity. You’ll want to participate as soon as the contest starts so that you don’t get behind. 

Before you register for any demo contest, it is important to understand the unique rules that apply. You need to make sure that you qualify to enter so that there are no issues claiming your prize if you win. It is also important to look at the prize(s) and to make sure that any cash prize is fully withdrawable, so you don’t waste your time. If there are requirements for a certain trading volume to be met or other rules before the prize can be withdrawn, make sure that you’ll be able to meet those guidelines. You have a better chance to win a prize if you can find a contest that rewards 2nd and 3rd place winners. 

To give our readers a better idea of their options, we’ve provided a few examples of current demo contests that are currently available as of the summer of 2020. Keep in mind that these contests may expire or change over time, but this should give you a general idea of what’s out there. 

  • HotForex holds monthly demo contests that reward 1st place with $2,000, 2nd place with $1,000, and 3rd place with $500. Traders can view the current rankings online but be aware that all rewards are credited on a live account.
  • Atirox offers a monthly demo contest named Chasing Mavericks. The goal is to maximize prosses while incurring as few losses as possible. The monthly reward is $5,000 for the winner, but you need to register a real account with the company to participate. 
  • OctaFX holds periodic demo contests with the next one taking place on June 8th. The 1st place prize is $1,000, 2nd place wins $600, 3rd place receives $200, and 4th and 5th place takes home $120 and $80. The participant with the highest balance at the end of the round wins. You do have to register a live account to participate. 

These are only a few examples of demo contests that are out there, so be sure to look at other options. If you decide to open a trading account through a company for one of these contests, you’ll need to make sure that they offer attractive trading conditions on their live accounts. Also, know that it isn’t easy to win these contests. Most of them look for the highest profit or the most growth, so beginners will have a hard time winning. Still, this doesn’t mean that you shouldn’t participate, since these contests will help improve your skills and you could still win a prize with hard work and determination. 

Categories
Forex Course

12. The First Step In Your Trading Journey

Introduction
Trading the forex market involves high risk. As per statistics, 95% of the traders fail in this domain. Hence, having expertise and experience in trading is very necessary for

Introduction
Trading the forex market involves high risk. As per statistics, 95% of the traders fail in this domain. Hence, having expertise and experience in trading is very necessary for

Introduction

Trading the forex market involves high risk. As per statistics, 95% of the traders fail in this domain. Hence, having expertise and experience in trading is very necessary for staying away from the 95%. And in this course, we’re here to guide you on how to be a successful trader. So let’s discuss what your first step should be in your trading journey.

Demo Trading

As mentioned, forex is a very risky business. One must never enter the live market during their initially early stages. So, brokers help the novice traders by providing a facility to demo trade. With a demo trading account, one can place live trades in the market just like a real trading account. In this account, you get virtual cash to place trades on the live charts. Moreover, in this platform, you get all the features and tools that are available on a real trading platform. And the best part is that this platform is provided by brokers for free of cost.

Advantage of Demo Trading

Helps test your strategies and techniques

There is no strategy that will work with 100% certainty. So, testing a new strategy on the real account can cause damage to your account balance. But, with a demo account, you can test your strategies without any risk.

Gives you a hands-on experience on placing orders

In forex, there are different types of orders. With a demo account, one can test the working of all these orders without the fear of losing money.

Helps concentrate on analysis rather than emotions

Emotions play a major role when it comes to trading. Emotions in trading can lead to huge losses as it takes over the actual analysis. One can reduce emotions entering into them while trading, only when they start gaining experience. Hence, trading in a demo account can help you focus on your analysis rather than emotions taking over.

How to create a trading plan

Well, having experience in demo trading is insufficient to start trading the live markets. A systematic plan for trading plays a vital role, as well. Below is an example of how you can create a perfect plan for yourself.

Choose your time zone: Though the forex market is a 24 hours market, it is not ideal to trade anytime in the day. Hence, you must choose those zones which bring in great liquidity and volatility in the market.

Fix your timeframe: You must be firm on one set of timeframes because switching over timeframes is a clumsy way of trading.

Choose the right currency pairs: There are about 28 majorly traded currencies. Keeping track of all these is a challenging task. So, you must select only a few currencies and analyze them deeply.

Have one fixed strategy: Novice traders look for new strategies every trading day. But, this is completely the wrong way to trade as it becomes more like gambling than real trading. So, you must have one standard strategy in which you can keep optimizing with experience.

Maintain a trading journal: This can be the most vital plan in your trading plan. However, many take this for granted. With a journal, one can keep track of their past transactions and get a statement on the number of loss & win trades. It will give you a clear picture of your consistency. This can help you improve your trading by learning from past mistakes.

By following these steps, you can be sure that you are up to a great start on your trading journey. Take the below quiz to check your learnings.

[wp_quiz id=”45923″]