UweMoench posted: That called success in Forex doesn't come only by practical learning. We attain success by a combination of both theoretical and practical knowledge of which Demo only guarantees the practical.
Should be practiced with real money. It can be used to develop psychology. And if there is real money, the original practice is complete.
It depends on which goals you want to achieve with demo account. If you are completely new to trading and you don't know how to use the trading platform, then demo account will be of great help for you to learn how to use that in the most eeficient way. More than that, demo account is a great thing to check some new trading ideas. Before implementing new trading strategies, you definetely need to know whether these ideas have anything to do with the reality before risking your real money. However, you should understand that trading demo will never make you a good trader. THe fact is that there are so many things which are not present in demo trading, for example, trading osychology which affects traders greatly. You definetely need to train and improve your emotional well-being in order to resist huge psychological pressure. More than that, there are no slippages and requotes and fees when you trade demo. These things also need to be calculated and paid attention to while trading real account.
I think it is important to use a demo account to get a feel of trading especially if you are a beginner trader, however like a few people here have mentioned, it does not give you the experience of trading psychology that you feel when actually trading with a real account.
I think a mix of both (demo and real) where the real only has a small balance, which you can use to build your trading experience, work on your strategy and build trading psychology is definitely ideal.
James_Bond posted: What do you think? Nowadays, when you can open an account with as minimal as $1 deposit, does a demo account works for the best interest of the trader or not?
I will clarify; the point of a demo account is to get a feel of forex trading, however it creates the psychological illusion of not caring of any losses/wins and taking enormous risk without having to confront consequences (psychological side). Short term, a new forex trader won't need to deposit any funds to try trading, however longer term, he/she is most likely to lose his/her first deposit after trading a demo as those are 2 different trading environments.
So why not start with a real account in the first place? A demo account will just make a newbie trader over confident thus causing him to deposit more than what he/she would deposit for testing purposes in the first place. Therefore, I think a demo account is simply disastrous for new traders and is actually achieving the opposite of what it should.
In my experience, demo trading is very necessary. If a trader gets over confident with demo account, he will be over confident with live account as well. By losing real money, he will lose confidence. There is a saying in the market ' One day you did not have experience but had money. Today, you have experience but do not have money to trade with'.
Demo accounts are absolutely necessary for new and experienced traders to try out new trading techniques before you put real money on it. My trading philosophy has been tested since 2018 with demo accounts to see if they were viable long term. Once they were, I put them in real money accounts in 2021. The demo accounts are still active and have similar results with the real money accounts till this day.
Integrity is the seed for achievement. It is the principle that never fails. - Earl Nightingale
Predominantly yes. However, if you have already learnt plenty of information about trading and investing, then perhaps you can start off from the real account. The main here is to understand that you will definitely have losses on your first steps. There are no traders who haven't faced losses on his first steps. Basically, you can start from real account, but I would recommend you to prepare a particular sum of money which will be used as practice. For example, if you have 100$, then you can allocate 50$ for practicing and the rest part you will use after getting some experience.
In my opinion, it is extremely essential for all novices to begin with demo accounts and learn the basics about currency pairs, software, and learn about risk and money management strategies. Even though it doesn’t guarantee profits in a live account, it is still essential for the overall growth of a trader.
Even despite using demo accounts, many traders fail in forex trading due to lack of right psychology and risk management. Demo accounts can still be very helpful to those who have nil experience in the field of trading. I agree that trading is all about risks, but the risk isn’t worth it if you have ZERO skills. Inexperienced traders can use demo trading to create strategies. You can move to a real trading account once you have some skills.
It depends on the person only. But to understand the market patterns and how the market behaves, how it reacts to support and resistance, NFP, News it is always better to try on Demo account. But for money management and test to your real psychology you need to put real money which you are ready to lose without any pain.
Demo trading is extremely important when you are a beginner trader and want to understand how this 6 trillion Dollars forex market works. This is just like learning how to swim in a pool before diving into the ocean. I have practised a demo on fxview mt4 for 10 - 11 months which made me notice the whole different practical approach as compared to what I have read. Demo trades really give you a nice exposure and must not be skipped when you’re thinking about entering the forex market.
Trading psychology is critical in a trader’s journey because it impacts trading decisions. So a micro account is a good place to begin for traders. But what is the point of directly trading live if you are neither familiar with the trading platform nor have the skills? Demo accounts are not perfect; however, they are good for inexperienced traders to develop some understanding of the market. New traders should trade with micro accounts once they have some clarity of the market.