It is common for new traders to be recommended to use demo account, since this account type can easily fulfill beginners’ needs by providing easy trading conditions. Moreover, the best demo account brokers allow traders to freely trade without losing their investment. After getting used to demo account, traders should be ready to use real account and face real trading issues.
The whole stages of a trader can be shortened into this diagram:
Note: Traders should be aware that demo account is not their only choice, since Cent/Micro account is also very beneficial due to their practical benefits.
Demo account’s biggest benefits is its risk-free nature. Beginners choose demo account because it has simple trading conditions and there is no risk of losing money. However, this benefit can also become the lethal drawbacks, in which traders will have no sense of risk management and calculating their trading methods. This is why in recent years, traders are advised to trade using Cent/Micro account from the start to get used to the real life forex trading.
Below Is The List Of 4 Best Forex Demo Account
- Exness accounts
- Hotforex accounts
- XM accounts
- FXTM accounts
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Demo Accounts’ Standards
Standard account is prevalent due to its involvement of both Market Marker and STP accounts, which enable this account type to offer multiple attractive trading conditions:
- Standard lot size
- Standard transaction costs
- Standard spread
- Standard leverage
Unlike ECN accounts, demo account users experience more stable quotes and they do not have to face any slippages or gaps. Nevertheless, the volatile nature of ECN account can only be handled effectively by experienced traders, therefore an average trader is advised to trade normally with standard account if they are not experienced enough.
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The Best Account Type For Beginners
When joining forex trading, traders are often offered two main demo account types: Standard and ECN demo accounts. From my experience, new traders should stick with standard demo account since its trading conditions are relatively simple. After learning the fundamental concepts, traders should be able to switch to ECN account.
Disadvantages Of ECN Account
Volatile nature is the main factor that led to the submergence of ECN account. In contrast to the volatile nature of real ECN account, ECN demo account is in fact extremely safe and it is a beneficial platform for practitioners to test their trading tactics. Due to this huge difference, traders who let themselves caught up in ECN demo account too long will hardly adapt to the real trading world. In other words, these traders might win an enormous amount of money if they become over confident.
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Type Of Traders That Can Use Demo Account
Demo account is certainly suitable for traders who are new in the field that simply need a place to practice trading as well as learning the fundamental knowledge at the same time. However, I believe that Cent/Micro account should be more beneficial for traders due to their practical trading conditions.
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Demo Vs Real Accounts
It is a common misconception that demo account are the same as real account in terms of features. However, demo account is not capable of teaching traders about risk management since there is no risk involved. Here is a few other differences between demo and real account of the best forex brokers:
- Demo account’s quotes are more stable while that of real account is extremely volatile. In demo account, quotes are adjusted to enhance its user’s trading performance.
- Demo account provide a risk-free environment, while the real account demands users to be extremely careful with each of their decision.
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Time Allocation For Demo Account
Traders can try out demo account if they wish, but I believe they should spend roughly three days for this account type only. After learning the basic concepts with demo account, traders should switch to ECN account immediately and experience more practical trading conditions. Based on my experience, I believe Cent account should be more beneficial. Only with $10, traders can have two months of practicing and encountering real life experience of forex trading.
Below Is The List Of 4 Best Forex Demo Account
- Exness Mini demo account
- XM demo account
- HotForex demo account
- FXTM demo account
