Demo Account Trading Guide for Beginners
If you are a newbie to the world of trading and you would start to like making money, whether it be with Forex trading crypto, currency trading or stock market trading. One of the things that you should definitely try doing is using a demo trading account. If you try demo account trading, it’s a great way to help you learn how to trade without actually having to risk any real money. There are other benefits as well.
The simple fact of the matter is that if you have never traded on the market before and if you do not know what you are doing, you are most likely going to lose every single last penny that you invest. People who just choose a trading platform and start trading without any kind of education or training usually fail and lose their money. Of course we are here to help prevent you from losing all of your money, and This is why we recommend doing some demo account trading.
The reality here is that demo account trading is extremely beneficial in many different ways, and of course, we will talk about all of these benefits here today. It’s all about being able to practice your skills without actually having to risk real money. Of course, there are some drawbacks to using a demo account, but with that being said, with the tips that we are about to provide you with today, you should be able to engage in demo account trading without suffering from any of the drawbacks while also reaping all of the benefits.
What is Demo Account Trading?
Alright, so just in case you don’t know what a demo trading is, this is when you go to any trading platform or broker and choose to use the demo account. For those of you who don’t know what a demo account is, this is also known as a demonstration or practice account, and the point of it is to allow people to test out the platform and to trade under real market conditions without actually having to risk any money.
In other words, it’s more or less just an inactive version of the live trading account where you can place trades under real market conditions and in real time, just without having to put your real money on the line. It’s really no different than using a race car simulator to practice your race car driving skills. It’s all about providing you with the knowledge, tools and skills that you need in order to be a profitable trader.
Of course, when you practice, things can and do go wrong, which is obviously why you don’t want to risk real money. It’s all about providing you with realistic trading conditions, so you can test out both the trading platform in question and your own markets trading skills.
The Benefits of Demo Account Trading
Now something that you might be wondering here is why you would ever engage in demo trading when you could just start trading with real money and make profits. Well, the point here is that if you just start trading with real money, you probably won’t make profits, especially if you don’t know what you are doing. So what are the benefits of doing demo account trading?
- Of course, one of the main benefits that you get by doing demo accounts trading is that you can actually test out various trading platforms. The fact of the matter is that not all trading platforms are the same and they all function in slightly different ways. Some trading platforms might be more user friendly and easier to navigate than others. With that being said, your ability to navigate a trading platform is very important when it comes to your own success.
- The next benefit that you get with demo trading is the fact that you can actually figure out what market you want to trade on. It is important to note that Forex, cryptocurrency, stock market, and commodities trading are all fairly different. You need to know what type of trader you are and what market you want to trade on before you can start risking real money.
- Moreover, when you do demo account trading, you also get to figure out exactly what trading involves and how it works. Of course there are many different aspects of trading that you need to master, and using a demo account is a great way to practice all of them.
- Another thing that demo account trading helps you figure out is what type of trader you are. Some people like scalping, trading, where trades are only open for a few minutes. Some people like day trading where trades are open for no longer than a single day. Some people like swing trading where trades are open for various amounts of time, sometimes up to several months.
Trading with a Demo Account – Tips
What we want to do right now is to provide you with a few extremely important tips for demo trading so you can be as successful as possible, especially when you go to transition to real and live trading.
- First and foremost, you need to create a trading plan. This means that you need to figure out what trading method and style is best for you, what markets to trade, the timeframes to trade on, when to exit to take profit, when to exit to stop losses, and how to apply position sizing.
- If you plan on doing extremely high frequency trading then you should use a demo account for at least a month. But if you are doing low frequency trading, especially when trades are open for a long period of time such as in swing trading, then you should use a demo account for at least three or four months.
- What you also need to do here is to develop a solid trading routine that you stick to when a demo account trading. This is going to be the same routine that you follow when you do real trading. Of course, having a solid routine in place is extremely important when it comes to your overall success.
- Perhaps the most important tip for you to follow when it comes to trading with a demo account is that you should try to spend as little time as possible trading with a demo account. Demo account trading is only useful insofar as it teaches you how to use a platform, and it teaches you some of the finer aspects of trading itself. With that being said, trading it with a demo account doesn’t help you build confidence, and it doesn’t help you make profits either, so you may as well start trading with real money as soon as you feel confident enough to give it a shot.
The bottom line here is that if you want to become a much better trader and you want to decrease your risk of losing money, then you should definitely do some demo account trading before you start risking real money.
If you need help day trading, and what you need is a comprehensive education, particularly on Forex trading, then the best place to be is the Income Mentor Box Day Trading Academy. At this time, the IMB Academy is the most comprehensive, user friendly, effective, and affordable Forex trading school out there.