Why the best demo account? When you’re first getting started with the trading market, forex demo account is often recommended as the more suitable account type for your needs. The reason for this is mainly because demo account is specifically created with beginner’s needs in mind, thus the easier trading conditions and other benefits. And when beginners are familiar and have sufficient knowledge of forex trading, real account should be their next step to gain furthermore experience in handling trading conditions.
To sum it up, every trader’s learning stages are listed as follow:
Note: Demo account sometimes is not suggested as the best account type for beginners, while Cent/Micro account in turn is more preferred and gained even more popularity lately. For a more in-depth review of the Cent/Micro account type, please refer to this article.
As we all know, the best demo account’s best advantage is its risk-free environment. People trade using demo account because it’s easier and there is essentially no risk of losing any money. However, the best demo account still has its downside which is its own risk-free environment. Since there is no risk involved, there is no reason for beginners to be careful and to calculate their every trade, which is why it’s more recommended for beginners to switch to Cent/Micro account once you’re familiar enough with the forex market.
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What is the standards of the best demo account?
Standard account is the more popular account type which include Market Maker and STP accounts, and as the account name suggests, standard accounts have all the necessary trading conditions such as:
- Standard lot size
- Standard transaction costs
- Standard spread
- Standard leverage
Nowadays, standard account is more recommended for regular traders due to its stability, unlike the ECN account which is known for its volatility, unstable quotes, slippages and gaps. Some of you may think of ECN account as the perfect account for trading and to be honest, that statement might be true to some extent, but the majority of traders aren’t expert and therefore should go for the safer route that is standard account.
What demo account type should beginners open?
Currently, there are 2 types of demo account: Standard and ECN demo accounts. As for me, I highly recommend beginners to go with the standard demo account at first and then process to the ECN account later on, once they’ve had enough experience. The reason for this is because beginners need to learn the fundamentals of the market as well as get used to the trading conditions so that there won’t be any confusion when they trade using the ECN account.
Why is ECN demo account advised against?
As we all know, ECN account is the most volatile account there is. ECN demo account, however, isn’t that dangerous and is actually a pretty safe platform to practice trading on, which for me is very unusual. After doing some researches, I’ve learned that ECN demo account is vastly different from the regular ECN account. It replaces the usual unstable quotes of the regular ECN account with the more stable ones, which in turn will make the traders who use ECN demo account win the majority of the time and make them feel over-confident. All this are part of the scheme to make the transition from ECN demo account to regular account difficult for the traders, and the over-confident that they once experienced will eventually lead to losses of money.
What are the differences between forex demo and real accounts
Forex demo account is often advertised to have the same benefits and trading conditions as the regular, real accounts but the truth is that it is not. Most traders who have traded and won the majority of the trades using the the best demo account, often find themselves facing difficulties and potential losses when trading using the real account. The reasons for this are because:
- Demo account’s quotes are different than that of the real account. The quotes are adjusted to deliver better trading performance to its user.
- There is essentially no risk involved when trading using the the best demo account. And since there is no risk, there is no reason that demo account traders would learn any kind of risk-management.
Which type of trader needs the best demo account?
Demo account is suitable and is best for anyone who’s new to the whole forex trading market and want to learn in a risk-free environment. However, if you’re truly serious about learning forex trading, I’d recommend Cent/Micro account since you can improve your trading skills better this way.
How long should beginners practice trading with the forex demo account?
As I have mentioned above, Cent account is more advised for beginners who’re more serious about learning the forex market. With Cent account, you need to only deposit $10 to be able to trade under the real trading conditions for a month or two. However, if you’re dead set on learning with the best demo account, your learning time should be relatively quick and be over in no time. Specifically, 3 days is a long enough time for beginners to learn the basics of the market and after that, the wiser thing to do would be to move on to Cent/Micro account or regular account. As for Cent/Micro account, the recommended learning time is 3 months in order to explore all the trading tactics and learn about risk-management.
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