What is a Demo Accaunt and Why You Need it

Before you start risking your money on the markets, it is recommended for a beginner to get some practice with a demo account (short for demonstrative). This is a test account which is technically similar to the real one, except the most important thing: you can not operate with real money in it.

When choosing a broker, pay attention to whether it provides a demo account. As a rule, companies like GoCapitalFX and similar ones, have such an option. When you open a test account, you do not need any documents, unlike when opening a real one, so it’s pretty simple and quick to do.

What the demo account gives?

Thus, you will gain experience — an indispensable component in any activity.

How long will it take to train before moving to a real account?

Depends on your abilities, of course. Demo account “lives” for a month in most brokerage companies, like GoCapitalFX, or any other. If you feel like you need more time, you can open it again after the month passed. Just be aware of getting stuck at this stage, because it’s not hard to trade with “toy” funds — here everyone can be bold. But when it comes to your own money, the mechanisms and patterns remain the same, but everything acquires a different color. With real money, such strong factors as fear, greed, excitement come into play, and you also need to learn how to cope with them.

Therefore, having bargained a couple of months on the demo, it is advisable to switch to the real account, starting with the minimum amounts. At various brokerage companies the starting minimum deposit is different, for the same GoCapitalFX it is $ 250, for others the it can be either less or more.

It can be concluded that the test account has one significant drawback — it relaxes the novice trader if to use it for too long. sometimes it’s really hard to re-adjust your psychological attitudes when you start trading with real funds, and it should be taken into account.

In addition to a lot of usefulness for a beginner, a demo account can be handy for an experienced trader: here you can test your new trading ideas and strategies. If you already have a real account with a broker, is it GoCapitalFX or any other company, you can get the testing one at the same time.

Related posts:

I started with Python in December 2016 with Udacity’s Intro to Computer Science course. I progressed through the course well enough, and found the language interesting, but learning for learning’s…