How to use a demo account to learn how to trade?

In trading, in addition to the opportunity to obtain benefits with very low costs, one of the main advantages is the facility for anyone to learn how to invest without putting your money at risk from the outset. This is due to the existence of demo accounts.

What is a demo account?

A demo account is a type of trading account, offered by most online brokers (Demo Account Brokers), so you can test the investment platform and make trades with the same trading conditions as in a real account but with money Virtual, that is, without putting your capital at risk. Both the winnings and the losses in a demo account apply to a virtual balance that you have available since the opening of the account.

The demo trading account is also the most advisable way to learn how to invest since you can use it to analyze the market and build your investment strategy. Through the tests you do in demo you can build your own trading system to make it profitable, learning from mistakes and successes, without putting your money at stake.

A frequent mistake of many traders is to start directly with an account with real money or to start with the demo but to move in a rush to the real one without practicing enough. This will make you not clear how and when to operate and end up losing your money much faster than you think.

One thing you should understand from the beginning is that trading is not a game of chance. It is not a matter of "guessing" by intuition in which direction the market is going to move but requires training, experience, discipline and effort. With a demo account you will not invest your money from the first moment but you will have to invest your time and be patient. If you are willing to work to become a profitable trader then we will see what is the correct way to learn to invest with a demo account.

What is the proper way to trade in a demo account?

Based on our experience, these are the 3 main factors to learn correctly to do trading through a demo account:

1. Take the demo account as if it were a real account

The most important recommendation for you to learn how to invest correctly with a demo account is to take the operations you perform as if you were trading on a real account with your own money. Try to forget that the balance of the demo account is virtual and that nothing happens if you lose it. If you would not like to lose your money in a real account then try not to lose it also in demo.

Do operations without control, take on too many risks, open positions without trying to build and debug your own trading strategy, not analyze what works and what not, are the most common mistakes that can end the balance of your demo account quickly , Or worse, take you to waste your time without learning anything and create bad habits that you can repeat in a real account.

Acting with discipline is key. Try to put you in the position that it is your money that is in irrigation and will help you make your decisions with greater caution. When you still do not have the knowledge, the experience and a strategy that has given you a good result, it is always preferable that you try to learn and not "bust" the demo account that try to get great results without knowing how and most likely assuming a risk very high.

2. Open the demo account with an appropriate size

Some online brokers offer their demo accounts with a default balance that can not be changed and others allow you to choose the amount of virtual balance available in your demo account. It is advisable that your demo account has a balance as close as possible to the balance that you would be able to invest in a real account. If the broker does not allow to choose the balance because it tries to count only with a part of the virtual balance similar to the one that would have available in your real account.

If in the demo account you handle for example € 100,000 and then your real account you would only open it with € 1,000, the operations you carry out are not going to be the same size, the risk level will also be different, the impact of the losses or benefits on The balance will also be different and all this will condition the trading decisions you make. If the balances you use in the demo account are similar to those you would use in a real account, it will be much easier to use the same strategies with the possibility of obtaining similar results, control the risks in the same way and take the demo account of one More serious, as discussed in point 1.

3. Unhurried

Do not try to rush into a real account. Try to learn and get good results in the demo account and on a sustained basis over time. So important is that your trading system is profitable as it is consistent and you can make a profit in a sustainable way over time. If this does not happen in a demo account it is unlikely to happen in a real account.

Even if you take the demo as if it were a real account, the psychological pressure you will have on trading your own money will always be greater, mainly because of fear or greed. If the demo results are not yet adequate, you should act with patience, try to expand your knowledge and improve your trading strategy. Do not try to autoconvencerte and open the actual account if you are not ready.

Getting a good trading system is not impossible or extremely difficult, but it requires work, time and patience. Do not go crazy with the rush and do not try to compare yourself with other traders or with results that you can read on the Internet and that can perfectly be unreal. Achieving high returns in a short time is only possible by assuming high risks that can also kill your account in minutes. You have to develop your trading system little by little to make it profitable, a system that you feel comfortable with and that you can replicate perfectly in a real account.

In this comparative table you can see those brokers that we have analyzed and that offer a trading demo account : broker forex terpercaya dan teregulasi