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For those people that do not know; a demo trading account is exactly the same as a normal trading account but the money used to trade is fake. The market conditions, movement and prices are exactly the same as the live markets but no real profits or losses will be achieved. A demo account should be provided by all reliable Forex brokers. If they are not provided then maybe you should look into signing up with another broker. If they do provide a demo environment then it is worth checking that there is no expiration date. Unfortunately, some Forex brokers only allow a demo account for a few weeks or months. The ones that allow it permanently should be considered more. There is a debate that after the initial lessons about the Forex industry, new traders should be thrown into live markets during Forex training. Some traders may succeed but most traders are likely to fail. Simply learning to use a trading platform during Forex training is not enough. Students need to build up ‘screen time’ which allows them to see how the market behaves at certain times during a trading session. They also need to see their Forex trading strategies at work to see how successful they are and when they should not be traded. We could argue that strategies taught in large financial institution are proven and successful but strategies alone are not enough either. Emotion Emotion is a characteristic that every human in world has. It makes us panic, be happy and generally react to situations in a manner we see fit. Unfortunately, this is the problem. If a new trader is thrown into live markets his/her emotion could get in the way of their success. The problem is that trading demo money and live money is not the same, despite the fact it seems to be on the surface. When real money is traded our emotions create the fear of loss. Once this loss is connected to our career, it takes over our body and makes us panic in situations when important and quick decisions have to be made. We do not feel like this during Forex training when we trade in a demo account. The fear of losing our investment capital or our job is not there because – we are in training. Once you are in live markets that training stops. Ego Let’s say that a new trader was successful in a live trading environment with around 10 trades in a row generating profit. At some point, this success rate will make the trader believe that they have the market cornered and they will not make mistakes. This always results in lack of attention to detail and when they least expect it, their success rate plummets. The key factor to consider here is that egos cloud our mind to a state where we think our own rules are better than those we were taught during Forex training. The point of this article is to send a message that it is not just the technical trading stuff that demo accounts help us with; it is the psychological stuff too. This is why professional traders still have a demo account accessible at all times to re-gain their confidence or to simply re-confirm the rules they have been taught. Our website provides the most comprehensive Forex training course which is aimed at new and up-coming traders. It also includes a list of trusted Forex brokers which you can chose from to start trading.
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