Trader’s first practical experience typically starts with trying to gain an understanding of the essence of a demo account. During this stage, you can proceed to the analysis of the trading instruments, making forecasts, and opening trades… without risking anything. This is because we are talking about the live market and virtual money.
Being able to use this fantastic ‘training simulator’, a lot of newbies still do not make the most of it. This is all because they don’t really understand what the demo account is.
In this article, we are going to reveal how to use the Forex demo account effectively, what it is, and how to make money with it.
First things first, let's try to answer the question: “What is the demo account in forex?” This is a type of account where you can trade by using live market situations but your money is virtual and not real. As far as the features go, it’s essentially no different from the live account. However, there’s one thing that makes it stand out - there’s no risk or possibility to spend the profit you have earned.
1. To learn the features of the trading terminal, how to open trades, place stop-loss, and take-profit orders, record results, and do the market analysis.
2. To test out the trading strategy. Without risking anything, you can figure out whether or not it is profitable.
3. To learn how to control your emotions in the course of trading.
4. To identify mistakes and correct them.
5. Polish your trading plan and learn how to trade in the black.
6. And even make money in certain cases. Keep on reading to find out how to do that below.
As we have already established what the demo account is, now let’s move on to its purpose. Many newbies often believe that a demo account is a perfect place where they can do whatever they want and can get away with anything. Since there’s no risk of losing money, it automatically means there’s no responsibility or consequences. But it’s not all that simple.
When figuring out how the market works and trading with the demo account, you are basically shaping your trading habits. It’s a well-known fact that our habit is second nature. It’s not easy to get rid of it. So, when you are trading recklessly by hit-and-miss with the demo account, you are developing habits that can potentially lead to the loss of real money once you switch to the live trading.
1. They open the trades chaotically without sticking to the strategy.
2. They do not place a stop-loss order.
3. They do not calculate the volume to enter a position with.
4. They do not manage risks and ignore money management rules.
5. They do not keep a trading diary.
You can only make virtual money in the demo account. This statement is almost always true, except when we are talking about a trading demo account contest hosted by Gerchik & Co.
We have mentioned earlier that there is a way to earn real money with a demo account. By demonstrating your trading skills and positive yield dynamics in the virtual account, you will be able to earn real money and start your career as a trader.
By knowing what the demo account is, you can show your professionalism in the course of the contest without risking anything, unlike in the cases where the real money is involved.
2. Start trading by following your strategy and using clues from this article on what the demo account is and what it is meant for.
3. Based on trading results, you can make it to the TOP 55 and get your hands on real money, namely $1,000.
4. This will be your launchpad for the trading career that doesn’t require your own financial investment except for knowledge and the ability to trade profitably.
5. You will then be able to make real profits and find investors who will be willing to invest their money in your strategy.
As you can see, now its a high time to take the demo account seriously, make real money with it, and get your foot in the door of professional trading. Go for it!