Trading CFDs carries considerable risk of capital loss. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.

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The forex demo account

March 20, 2018

A demo account is an excellent tool to start trading.

A part of those who populate the forex market can certainly be considered gamblers rather than professional traders. This article on the net, explains quite well the answer to the question “Trader or Gambler?” in a few points.

The legitimate (but unrealistic) search for easy earnings in a short amount of time leads many bettor traders to jump into the forex market immediately using real money: this can cause strong disappointments and numerous abandonments from the activity in the first months.

The so-called bettor trader enters the market convinced of being a good operator with an adequate level of technical preparation. In his view, this will allow him not to run into the most common mistakes and losses that represent the downfall of numerous forex beginners.

Unfortunately, those who do not have a trading plan, those who do not know what money management is, those who suffer emotionally at every trade, those who trade too frequently on the market must be considered as bettors and are not aware of their limits unless they completely lose the invested capital.

The first rule that this kind of trader should learn is that it is much better not to trade real money, but instead take a little bit of time to reflect, study and open a demo account.

Once this is done the bettor trader will be able to begin with his own strategy with a greater confidence and less pressure, taking all the time to perfect and adapt his strategies in order to generate some profits. Only in this way the bettor trader will evolve into a professional trader.

On a demo account, the trader will not have the psychological pressure (and this is one of the main limitations of the demo count) and will tend to remain more relaxed. The healthy tension of real money that enters the market arena will be lacking, but soon there will be a good time to start working on a real account with a higher and better knowledge of the market.

Through a forex demo the trading strategy can be tested on the market avoiding too frequent trades that could partially or completely damage the invested capital. The trader will have to learn how to follow the trading plan, in order to avoid bad accidents along the path.

3-4 trades per week on average are enough to guarantee discipline in all the operations. The rigid and objective use of reliable strategies should allow the trader to assume a true professional attitude.

The demo account will allow the user to become familiar with the trading platform of the broker to be ready to operate effectively with real money at the right time.

Obviously, all the earnings during this trial period will not be converted into real money, but this will serve as a yardstick for the effectiveness of the adopted trading strategy.

Humility and method: these are the two pillars that must accompany every trader in his activity. The demo account serves precisely to perfect these two characteristics, true keys to successful trading.

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