Why use a demo account? It is a thought many people have, both novice and experienced traders alike.
The simple answer is that it allows you to practice trading without using real money, so if you are new to trading, using a practice account will allow you to hone your skills before putting any of your cash at risk.
It doesn’t tell the whole story. There are 20 reasons why beginners should be using a demo account in Mena before they trade with real money.
10 Advantages of Using a Demo Account in Mena
Precision in Measurement
When you use a demo account to trade, you will study the markets and make informed trading decisions.
You will not feel pressured in any regard by the fact that you are only using virtual currency, and users can make exact measurements in terms of their trading performance and risk profile.
A Chance to Practice
Beginners should start with a demo account because it allows them to practice without risking real money.
It allows them to get the hang of things before moving on to live-action trading, where they need sound knowledge not to get burned or scammed out of cash by market forces.
Familiarising with the Site
Many different online brokers offer slightly different services for placing orders, dealing with charts and graphs, etc.
By using a demo account at your chosen broker site, you will be able to get familiarised with its layout and features before you start trading for cash.
A commitment of Funds Not Necessary
A significant problem that can arise if beginners try to trade live currency markets is sometimes they lack the funds needed to maintain an active position in the market.
Beginner traders may panic or freeze when this happens, only exacerbating the situation further.
Using a practice account allows these traders to take more risks than they otherwise would because their financial commitment is limited.
Getting Used to the Time Frames
When trading live markets, novice traders can get caught up in an emotional whirlwind.
The best way to work through this problem is by getting used to the time frames that the different instruments trade.
In this way, traders can keep their cool and make informed decisions based on facts rather than hunches.
Trading with Virtual Cash Not Necessary
Many people will be put off starting with a practice account because they feel it’s inferior to using real cash.
However, using virtual money to trade allows people of all skill levels and backgrounds to try their hand at online trading without losing any real money should things not go according to plan.
No Need for ‘Real Money Accounts
You will need a ‘real money brokerage account with an online broker to start trading, but this does not mean that you have to use live currency from the outset.
You can set yourself up with a practice account and then, when ready, move on to a real money account in Mena. There is no need for beginners in the markets to jump straight in at the deep end.
Trading Currencies
One of the great things about using currencies when you are new is that these instruments often trade flat for long periods.
It allows novice traders to take advantage of price fluctuations without fear over whether they are over-leveraging or taking too much risk when starting.
Virtual Currencies
Many different virtual currencies can be traded, including cryptocurrencies like Bitcoin or programmable money like Facebook Credits.
If you are serious about trading markets, then it’s well worth looking into these options as they offer great diversity in trading instruments and may even enhance your profits if done correctly.
Multiple Markets
If you are new to this world of online currency trading, one thing that may surprise you is how complex markets can become when they open up multiple asset classes within a single contract.
Using a practice account to trade these instruments will quickly become familiar with how they work and their associated risks.
Link to Saxo bank UAE for more information.
