Broker to Trading

A trader may wish to open a demo account for a number of reasons. If they are beginners, then they can practice trading on a demo account, without any risk to their capital. If they are more experienced, then a demo account can help a trader familiarise themselves with the broker's online trading platform. And all traders can take a time out and practice trading on the demo account.

A demo account can typically be converted to a real account if the trader wishes to do so (but the demo account may expire). The real account may have a minimum deposit requirement, but in all events to trade in a real account, the trader will need to deposit some money to trade (to open positions).

A demo account is free and comes with funds to practice trading, allowing the trader to start trading with no deposit, but this is not real money and cannot be withdrawn or used in a real account. It should be noted that while a trader may perform well when trading a demo account this does not mean that they will do so when trading in a real account.

Traders who want to keep trading may find that the capacity to step back and examine their trading to be helpful from time to time. This is because the market is complex. Strategies applied to the market may work for a while and then stop working. Because a trader typically follows rules when trading, they may in fact become like a robot trader to some extent, applying a rule even though the market may not be responsive to this rule.

The advantage of the human trader is that they can in theory step back and see why a rule may not work and change it if necessary. But it is easy not to do this when trading in the live market, and keep applying the rule set, as a robot will do. Thus switching to a demo account makes certain that the trader can step back and trade in a market where money is not at risk, i.e. on the demo trading account.

The trader can approach a demo account in a systemic way as part of a trading process. That is as well as using a demo account to step back, if necessary, they can test out new ideas and strategies in the practice account, establishing a framework to decide when a strategy is ready to use in the real market.

At the very beginning, the demo account can be an invaluable way to become familiar with the trading platforms offered by the broker. Platforms such as MT5, MT5 and cTrader have many powerful attributes, but the trader may not use them unless they know what they are and what they can do. The demo account is a logical way to find out what are the features of any trading platform, and what the potential of these features is to enhance the trader's own trading experience.