CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the High risk of losing your money.

Difference between a forex demo account and a live account

  • Execution

    It is easier to trade with the demo account as you find out that commands are quickly executed than when using a live account. There is a delay when using the live account as the location of the trader is mostly very different than the location of the real market

  • Spread

    There is a difference in the spreads for a demo account and the live account. Spreads tend to be tighter in a demo account and this is experienced more when the trading environment market liquidity conditions influence the spread greatly

  • TP/SL Strategy

    The stop loss strategy is more effective when applied on a demo trading environment than in the real market. The real market is faced with an issue of clients and brokers not agreeing on the level that the stop loss order should have been applied

Benefits of Using a Demo Account

Development of a strategy. Demo account enables traders to test out different strategies and find out what is best suited for them

Practice of control of emotions. The most preferred way to learn how to control ones emotions n forex trading is by the use of a demo account

Enables traders to select appropriate instruments from a wide variety of currency pairs to trade with.

Using the demo account allows traders to try out different lot sizes and determine the most ideal lot size to use.

Demo Trading Success May Not Indicate Live Trading Success

The lack of actual money being placed at risk in demo accounts can result in significant differences between the performances achieved by forex traders in demo trading and live trading environments.

Traders might arise as a result of a different set of emotional responses on the part of the trader when nothing is at stake versus when they have substantial amounts of money on the line.

Irrespective of the source of the potential performance difference, it will need to be taken into account when traders are either learning how to trade forex or are evaluating trading plans and strategies.