Pros and cons of a demo account

Free Forex demo accounts are a tool that some people love and others hate. Why is this happening? How can a training account be harmful?

Of course, a demo account has its advantages, but there are also pitfalls that can negatively affect future trading.
Let's look at demo accounts from different angles. A demo account allows you to practice playing Forex for free.

For beginners this is just a godsend. And experienced investors use it to test their new methods and systems.

Brokers offer practice accounts. They do this to increase the number of their clients so that anyone can try trading currencies. This is normal, because any broker wants to attract more investors, since they have their own spread for each operation.

Currency trading is a complex business that should not be started without proper preparation. And you can practice on free demo accounts, trading with virtual money. Moreover, it is advisable to do this before acquiring the necessary self-confidence. You must understand that the system you have chosen works and brings stable profits. It is stable, not one-time.

This is precisely the key advantage of a demo account - you can understand the features of making transactions without the slightest risk!
But this is also the main drawback! When working with virtual dollars, you do not risk anything. You have a large account that you can spend willingly without much risk. After all, you have nothing to lose in the real world. This can lull you into a false sense of security.

For example, you once risked a large amount of virtual money and won. Then they again risked a large amount and again came away with a profit. Naturally, self-confidence comes to you, and you begin to take big risks in real life. That's the problem.

It seems to you that you clearly know what to do. You open a real account, fund it with real dollars and start a risky trade. But instead of profit, you suffer losses.

Demo accounts are very useful, as long as you trade them as if you were dealing with your own real money. Never trade on a demo account the same way you would not trade on a real one!

cent accounts instead of demo accounts - with a deposit of $10 or more. They trade real money, but in very small amounts so that the losses are not so significant. This is the best variant.

A demo account is more suitable for practicing technical skills in handling indicators, advisors and the trading terminal itself, but it is better to check the performance of strategies on cent accounts; cent brokers .