What All Traders Should Know About Demo Accounts
Trading Demo Accounts
If you’re plan is to trade your way to profits, then it is vitally important that you understand what a demo account is, along with what the benefits and potential drawbacks of using them are. There are a few tools that all traders have access too, tools which can help you to get off to the best possible start. Whether you plan to trade Forex or Binary Options, a practice account is available to you. Now, let’s talk more about the ins and outs of these accounts.
What is a Demo Account? – Trading Demo Accounts
A binary options demo account is a free account that will allow you to practice within a trading platform. Although there should never be a charge for this account type, you could in some cases be asked to fund your account before being provided with access. The reason behind this is simple – brokers want to make sure that you are serious about potentially trading with them before going through the trouble to set you up with account access. Of course the second reason is that they hope that once you are done practicing, you’ll decide to stay with them and trade within their platform.
A demo account should provide you with access to a trading platform that is exactly the same as the real platform, with the only difference being that you will not be trading with real money. No actual money is exchanged, so there will be no actual profits or losses. This type of protection means that you can test the platform with no worries. Advanced level traders may also want to use this type of account to test out various strategies. Do ask the broker to confirm that the demo platform is the same as the actual one. Any variances between the two could make a difference in your learning experience.
Benefits of a Demo Account – Trading Demo Accounts
The benefits of a Forex demo or binary options demo are quite clear. A practice account will allow you to view and become comfortable with the platform when choosing a broker. If you know what to look for, access could also allow you to spot any discrepancies. If you’re completely new to trading, you’ll want to see what the layout is, including the areas for trade analysis and execution. Of course, you can also test your skills to see how well you do, without there being any risk of losing actual funds. If you dislike the platform, you may want to consider signing up with a different broker. All of these are important benefits that make it worth the minimum effort required to sign up for a practice account.
How to Sign Up for a Demo Account – Trading Demo Accounts
Most Forex brokers and binary options brokers have a clear area on their website for registering an account. If you want to access a Forex demo account, you’ll likely need to download MetaTrader (unless the broker offers the browser version, WebTrader). For binaries, the platform can be accessed online. Signing up should only require some basic information. Do consider contacting the broker in advance to see if a deposit is required. There are a huge number of broker options available today, so finding a broker who will offer you a no strings attached practice account should not be difficult. You should be skeptical of brokers who require initial deposits as this is often a binary option scam.
What to Avoid when Trading Demo – Trading Demo Accounts
In general, there is nothing to fear when signing up for this account type, but there are a few things to consider. As mentioned above, the trading platform could differ from the actual platform. Ask if there are any differences, and if so, what they are. If you do decide to make a deposit in exchange for a demo account, make sure that you will be able to withdraw 100% of your funds should you decide not to trade with that particular broker. If you are offered a bonus at signup and accept, there will be conditions that need to be met before you can withdraw. Be certain that you know exactly how a withdrawal request would be handled. Most demo accounts do have limits. In some cases, the limit will be a set amount of funds to use. In others, it is a set time-frame.
If you need more funds or more time, contact the broker. Most reputable binary options and Forex brokers will be willing to give you what you need. A last piece of advice would be to try to make the most out of the time you have the account. With any form of trading, education is everything. The more you know, the more likely you are to start earning decent profits amount right away, rather than having to wait months and months to see solid numbers.
Hernaldo Turrillo is a writer and author specialised in innovation, AI, DLT, SMEs, trading, investing and new trends in technology and business. He has been working for ztudium group since 2017. He is the editor of openbusinesscouncil.org, tradersdna.com, hedgethink.com, and writes regularly for intelligenthq.com, socialmediacouncil.eu. Hernaldo was born in Spain and finally settled in London, United Kingdom, after a few years of personal growth. Hernaldo finished his Journalism bachelor degree in the University of Seville, Spain, and began working as reporter in the newspaper, Europa Sur, writing about Politics and Society. He also worked as community manager and marketing advisor in Los Barrios, Spain. Innovation, technology, politics and economy are his main interests, with special focus on new trends and ethical projects. He enjoys finding himself getting lost in words, explaining what he understands from the world and helping others. Besides a journalist, he is also a thinker and proactive in digital transformation strategies. Knowledge and ideas have no limits.