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
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
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
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.
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.
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