April 12, 2018 at 6:29 PM #7437
Actually, demo trading is not bad but there are reasons why we call it bad. If you look at the traders in the United Kingdom they handle the demo accounts in a successful way, so they know it is worth trading. But there are traders who make mistake when trading demo account. If you are a naïve trader you should bear in mind that demo trading is not healthy if you are doing it for a long time. Sometimes you may even doubt yourself whether is it possible to profit from live accounts. As traders, you should set be disciplined to trade for some time until you become familiar with the Forex market. Most traders continue to trade it out of interest although it is dangerous. If you don’t want to ruin your trading career you should learn the reasons why demo trading is bad. Of course, as a new trader, you should demo trade but it should not become your habit. You shouldn’t trade demo account if you are okay with the live account. When you demo trade at a point, you will understand that it is possible to trade demo accounts. In such instance, you should quit demo trading. There are purposes for demo accounts and they are learning the platform, understanding the market, making profits and so on. If you are trading the demo account other than these factors then, it is an issue.
When you demo trade the market you don’t really get any emotional heat. For instance, if you lose few trades, you will be absolutely normal since you know it’s not your real money. Due to this reason, many people often consider live trading account as the best way to learn currency trading. Use the smallest possible lot size to trade the market so that you don’t have to lose huge money. Try to master trade management to protect your trading capital from a big loss.
It doesn’t teach the ways to trade
First off, you should understand that demo trading account is not something that teaches you the ways to trade. Most naïve traders believe that demo account teaches them to trade Forex successfully although it doesn’t. You can never learn to profit by trading the demo account because it is just an account that helps you to practice trading. If you are making profits in demo account it doesn’t mean that you will make profits in the live account because they are two different accounts. You should use the demo account to get acquainted with the trading platforms, so once you are familiar you should shift to the live account. You should move on to the live account rather than sticking to the demo account. We have seen most naïve traders spending too much time on the demo account and it is the reason why we say demo account is bad for you!
Demo leads you towards failure
Of course, you would have come across many articles that describe demo accounts as a great method to achieve success. Definitely, the demo account is great but not for the ones who misuse it. If you are using demo account make sure to limit the duration because there are many traders who spend too much time on the demo account. They try to make profits on demo account which is stupid because it doesn’t matter. If you want to achieve the success you should go to live accounts once you test the trading platform and the environment.
The demo makes a trader gamble
There is another reason why demo account is dangerous i.e. traders try to gamble the market. In demo account they can risk as much as they want because it is fake money, so when it profits they become addicted and they repeat the process. When these traders trade the live account they try to do the same and it leads gambling.
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