Forex practice account offers so many benefits, but there are a few pitfalls too. In this article, we will discuss the advantages as well as the disadvantages you can get from using free forex practice account. The practice account enables you to practice trading in forex for free. If you are a new trader you are highly encouraged to take practice account or demo account so that you will have firsthand experience how it feels like trading in forex.
The advantages of foreign exchange practice account
It will not cost you anything. You just need to give your name, email address, and contact number.
You will be able to learn how to trade in real time and at the same time you will be able to familiarize yourself as to how the trading platform works.
You will be able to learn how to execute trades as well as learn skills on how to manage risk without really putting your money at stake.
You will be able to test various trading strategies under the real trading environment as well as market condition without compromising your capital.
Through forex demo account, you will familiarize yourself with the characteristics as well as the peculiarities of the forex market. Through it, you will also learn how to adapt various trading strategies.
The disadvantages of foreign exchange practice account
The forex demo account hardly helps you in honing skills particularly in money management skills. With the demo account, the practice amount would be $50,000 to $100,000, which is actually too big and unrealistic enough, especially if you are going to trade using micro account. With that amount, traders will be encouraged to take risk than they would normally do using real money. With that being said, traders can develop a habit that can be disastrous once traders go live.
With the free demo account, you will not experience the real gut feeling of creating trading decisions on the spot. If there is no real money at stake, the trader will have a limited knowledge and understanding in taking risk.
Are you planning to get a forex demo account? If yes, then you need to consider carefully the advantages as well as the disadvantages. Despite the disadvantages, still more and more people prefer to have forex demo account because it enables them to learn and understand the platform without really having the need to compromise their hard earned money.