When it comes to trading, anyone new to the scene isn’t about to jump straight into the action, as that would be disastrous. Trading isn’t something someone can really afford to make mistakes with, so gaining experience and developing a know-how prior to doing it for real is the way to go.
This is where demo accounts come in and they’re proving to be a huge hit with those starting out on their trading journey; as they cover the entire range of services. An ideal example being City Index, who offer demo accounts for spread betting or CFD trading to crypto and forex trading.
A demo account works on a real trading platform, but rather than traders using real money, they use mock currency. So, the first advantage is obviously that there is no risk involved financially. A demo account lets anyone who is a novice in the world of trading, to make the mistakes which could cost them money if they were doing it for real. This is all conducted in a setting where their funds aren’t at risk, allowing them to make these mistakes and to learn from them; ensuring when it comes to the real thing they will be wiser to it and obviously more experience.
With a demo account, a trader is also getting the opportunity to practice in a live environment. This will allow them to experience everything the market has to throw at them, while also being able to figure out the mechanics of how it works, as well as the dos and don’ts. Experience is key here and having access to a live platform will allow a beginner to really familiarise themselves with everything, especially if there’s a specific piece of software they will be using on a regular basis.
Every trader doing for real will have their own strategies which they have honed over time. These are often tried and tested methods, which they believe are the ones which work best for them. As with most things, there are multiple strategies out there, so trying out as many as possible is beneficial. With a demo account, this is all possible, but without the risk of losing hard earned cash. So, when the time comes to trade for real, a person will know which strategy or strategies they’re going to use, and they’ll be confident that they’ll work too, rather than it being a case of trial and error.
What is also ideal about a demo account is that a new trader will be able to test how good the support available to them is. Even the most experienced traders will run into problems at one time or another, this could range from technical issues to problems with depositing and withdrawing cash. If you use a demo account with a certain platform and realize the support isn’t up to scratch or isn’t what you’d expect, you haven’t lost anything and can go on and look elsewhere.
As with anything, it’s important to ensure you’re as prepared as possible before embarking on something new, especially when it can cost you financially. A demo account offers the perfect opportunity for a beginner to trading to start to learn their craft before they put their money on the line.