Forex Market

Are Forex demo accounts accurate? Answers and comparison with real accounts

Are Forex demo accounts accurate? Answers and comparison with real accounts

Forex trading is not easy and there is definitely a great deal of risk involved, especially if one is new to the trading industry. This is why a new user is often advised to use a Forex demo account to get things started. In fact, this is the reason Forex demo accounts exist, even though they have many other uses.

However, this does not mean that the trader should make a mistake and believe that the Forex demo accounts are completely accurate. Accounts are not, for a variety of reasons. Today, we are going to explain some of these reasons and explain the difference between Forex trading with a demo account and live Forex trading.

About Forex demo accounts :

For those traders who may not know, Forex demo accounts are practice accounts that a person can take and practice on Forex trading. They do not use real money, so there are absolutely no risks. The trader can use it to test different Forex trading strategies and get to know the Forex market.

A trader can use it to know how prices are changing, to test entry and exit from private positions in Forex, and try to earn some money without making any investment for anything. Of course, his money that he would earn would also be his fake money that he couldn’t spend and use, but his money was still good enough for him to cultivate.


View Accounts vs. Real Accounts: Learn the Biggest Differences :

  1. No need to use real money

One of the biggest and most important differences between a demo and a real account is that a trader does not use real money when trading in a demo account.

This is important because it changes the way a trader thinks and approaches his trades. As when it comes to the demo account, the trader is more likely to risk more because he knows he has nothing to lose. This may lead to some risky Forex trading moves, which he may regret if he repeats later, with his real money.


  1. Demo losses do not real

Also, it is difficult to develop a sense of Forex trading for the same reason. Finally, the trader will not have to face the feeling of losing their actual money. But after losing his fake money in case his trade falters, he simply has to make a point to be more careful in future trading. When a trader loses his real money, it can hit him hard, as he will realize that this is not a game. He lost the actual money that he worked and earned with his sweat and toil.

This can be very frustrating for a first-time Forex trader, and many people give up Forex trading altogether after experiencing their first losses. But this matter should not keep a person from practicing Forex trading, but the trader should be aware that it is a possibility and will happen to him in his trading.


  1. The demo trader’s order is always taken

Another big difference that exists is how a trader’s trades perform when they are practicing Forex demo trading versus live Forex trading. It is where a Forex demo account is created for orders that are always executed. A trader needs to experience the trade and know-how currency rates move. The trader also needs to test new Forex strategies, and he has no time to waste.

But this is not the case when it comes to the topic of live Forex trading, as his order may not be taken immediately. For many reasons, this can happen in trading. Where if the Forex trading volume is low, or the trader has just started trading Forex at some time of the day when the trading volume is low, his order may not take much time.


  1. Demo accounts are not accurate all the time

Another thing that a trader should remember is that a Forex demo account is created by Forex brokers who want him to start trading soon. 

As a result, the Forex trades that the trader makes while in the Forex demo account should not be considered real trading situations. There are a lot of Forex educational book situations that can take a strange situation in the actual Forex market. It is well known that developments do not always follow all the rules, and things do not always happen as we expect.


  1. Emotional difference

When a person trades with his real money, he may often approach without controlling his emotions. This is a dangerous trap that many traders can easily fall into. Whether the trader is experiencing losses or reaping gains, if these things keep appearing one after the other over and over again, the trader may start to get emotional and want to always take a risk, this is where he will end up really badly for his money.


  1. Other differences

Often times, a Forex broker does not offer its real Forex trading platform for viewing purposes. So the trader will have to get used to dealing with a real Forex trading platform, even if he has tested Forex trading by using a Forex demo account.

A Forex broker may not re-quote to a Forex demo account user, and then often re-quote to live Forex traders.

The trade stop-loss order may be executed precisely on the demo account, but not on the real one.

Previous post
How do you trade instantly as if you have long experience in the Forex market? Learn Forex signals?
Next post
What is the definition of long versus short positions in Forex trading?

Leave a Reply