ForwardX posted: Yes, it helps in making aware of the trading environment as well as helps to test the trading strategies before going live.
I agree - see demo trading as a trial run without the added pressure of losing money. Your system should be tested thoroughly before going live. The main thing for me is to gain trust in your system, then you eliminate most of your personal inputs that can have a big negative influence on your trading success. I would go so far as to say you need at least a 100 consistent trades, then you do not have to guess about the profitability of your system. It is also a good way to compare different/new currencies before live trading.
Don't agree with this. Demo accounts are one of the best hands on tools out there and while they may have blind spots in regards to risk management and psychological aspects, they still teach valuable lessons and stop us from incurring losses later on. You can also test your strategy on demo. Why rush into a live account with real money at risk (no matter how little) when you have no idea if you have a good strategy and have no experience? My advice is to trade on demo, hold yourself accountable for wins and losses (for example, reward yourself with dinner at your favorite restaurant for making x amount of profit or make yourself do so many pushups for losses) and research psychological aspects of trading simultaneously so that you go in well-prepared.
As demo account is the replica of real account, we can get all the facilities at demo account, what we can get at real account. Except that we will not get any earning. So we can practice at demo account as much we want.
I tend to suppose that it's necessary for those ones, who want to be a careful trader. If you understand that you can't take risks on yourself, then perhaps you have to start from demo trading. In this case you will be able to get acquainted with the whole system and understand whether this activity is suitable for your temper or not. If you have already understood that it's your activity, you can start from a real account but from the small volumes. I mean deposit of course. You can deposit 10% from the total amount of money which you allocated for trading and try to look at the graphics and make an analysis.
Demo account is useful to learn the basics. Like how trades are placed, how strategies are backtested etc. but it will not teach you how to control your emotions. This can be learnt via live trading only.