Should trading demo accounts be discontinued?
It is well known that a Forex demo account has three uses:
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For the new trader who needs to learn the basic concepts of Forex trading i.e. points and positions for long and short positions.
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Test the broker’s trading platform before starting live trading.
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The basic test of new trading methods.
A trader’s hedge fund can be intimidating because it is full of deals. A beginner trader opens a Forex demo account and triples his claimed money for it. Believing that this is a super Forex trader, he lives with a lot of profit and loses everything in the end.
The difference between demo Forex trading and live Forex trading is the same.
On the other hand, one has a fake Forex market that is not scary for him, a live Forex market that can be terrifying to trade with his real money.
Many traders use the metaphor of trading simulations to advocate the use of demo trading. They say that some of the talk about how to train Forex trading on a trading simulator has to do with Forex traders who are well trained on a Forex demo account. Talking here about the wrong concept of trading.
Does a trader trust a Forex broker on a trading simulator only? He won’t! All traders should record a large number of real Forex trades. Just as all novice traders have to compete for deals with real trading opponents, they have to train well in the real Forex account.
Demo trading is talk, so we’ll take a look at why:
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For an individual who does not trade with real money
It is impossible for an individual to feel the same uncomfortable in a Forex demo account because it is like playing with monopoly money. Think about it well:
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It’s not that real money is at stake.
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There is no real trading risk.
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If his trade goes bad he has nothing to lose.
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All the traders who have traded in real Forex accounts know about the ugly feelings that live Forex trades wash over them.
Those feelings are like:
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They are afraid of losing money
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Question technical Forex analysis whenever a transaction point moves against them.
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His nervousness and anticipation of a final trading result.
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While such emotions may be felt when trading demo Forex, they will not be felt to the same extent as when trading Forex live.
A professional trader learns how to control his stress. He does this by building his confidence through live Forex trading. The more deals he takes, the more self-confident, and the more numb he becomes of all his negative feelings.
When novice traders put their real money on the line, all those ugly feelings can raise their heads. Since a novice trader has not learned how to control his emotions, he can ruin his Forex accounts. Therefore, novice traders must learn to control their emotions well before they become profitable traders.
Trading with Monopoly money can’t give you the same rush of destructive emotions. In fact, traders who trade demos tend to take trades more freely and build false confidence. This often leads to the development of bad habits such as taking too much risk.
It doesn’t matter what you say to yourself. The feelings you feel when a Harley dude points a real gun at you are different from the feelings you feel when a little boy points a fake gun at you.
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The losses that occur do not seem real
When an individual starts live Forex trading for the first time. Whenever he enters into a trade, he will watch Forex charts like the eyes of a hawk. This is especially true when Forex trading conflicts with it. He will sit and watch, 2 points, 3, 4, 5, 6……. With every dot knocking against him he would feel more of his money falling out of his pockets. That’s the stinging feeling of losing money, because it would be real. When the trade finally comes to a stop, it will find itself either a winner or a loser.
Will he feel the same as losing his money with a Forex demo trading account? No! The trader may feel upset. However, he has the same amount of money in his bank account as he had an hour before trading. So he may not show any of these feelings by losing his hard earned money.
It must be known that the feeling of losing real money is an important trading lesson for novice traders. This loss must make them feel in order to grow as Forex traders. They also need to numb themselves for this feeling. All traders have losing Forex trades and learn to accept that losing money is this valuable lesson that traders must learn.
In order for traders to learn to accept loss, they have to go through losing real money.
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All demos of Forex demo accounts are fake
This is certainly not true with all Forex trading brokers but there are much more Forex brokers out there than we think they manipulate with Forex demo accounts. Slippage at trade entries and exits during volatile price periods is a large part of live Forex trading. Where it happens of course that is the nature of trading. The professional Forex trader knows this and deals with it.
However, there are Forex brokers that offer Forex demo accounts in which one may not get little or no slippage. This gives the trader a very false sense of how the real Forex market works.
Too many Forex demos give him a very misrepresentation of a Forex broker’s performance. So a novice trader who has been trading a Forex demo for several months trades in the Forex market much safer.
