You are a new trader who wants to get into investing in Olymp Trade. However, you’re not really confident with your trading ability? Want to experience new features, test Forex and Fixed Time Trade strategies to improve your trading skills? Let’s start with a Demo account. It is a great tool to help you implement these ideas.
In the article below, I will answer in detail some important issues related to Demo accounts such as concept, advantages, disadvantages, how long you should try Demo trading. Moreover, I will suggest you the right time to switch from a Demo account to a real one.
What is a Demo Account?
Demo account is an account type provided by a broker for market exploration and trading testing of clients. In other words, a Demo account is a simulation of a real (Live) account.
As such, you can test and trade with the Demo account on the platform like in the real market. At the beginning, you will be given a symbolic amount of virtual money of $ 10,000 to participate in trading. All transactions made on assets, profit–loss, leverage are the same as real accounts.
To start trading on the Olymp Trade platform, you only need to spend a few minutes registering for a Demo account. First, you need to click on the box below to open an account.
Then you fill in information such as email, password and choose the currency you like and then press “Register”.
Benefits of trading on a Demo account
If you trade with a demo account, then you will get the following benefits:
To familiarize yourself with the features of a live account on the trading platform such as placing orders, closing orders, leverage, and market analysis tools.
Help hone trading skills. This is an opportunity to test the strategy and make it even better. You will not face any financial risk because everything is completely free. Meanwhile, you can still improve your skills with the same experience as trading in the real market.
Helping traders better understand financial markets and trading tools. Before deciding whether to “put money” on a real investment or not, you can try until you feel confident in your knowledge, reactions, and strategies. Therefore, a Demo account is considered an indispensable stepping stone before trading with a real account.
It’s not just beginners who start trading on Demo accounts. Even seasoned traders often use these accounts to test strategies.
So the Demo account has disadvantages or not?
Of course. Here are the 2 biggest disadvantages of the Demo account
Virtual currency is not risky so emotions are never real. In demo trading, you can freely place orders without being influenced by fear or greed because they are only drafts.
With a Demo account, you are not at risk but trading with the real one is. If you trade at a loss and make a lot of mistakes on this account, you can easily get over it and trade again. If you enter the real market, you pay the real money after making a mistake.
So how long should you trade on a Demo account?
This is a difficult question because every trader is a different individual. Some people can learn very quickly compared to others, which means they can start trading for real sooner.
On the other hand, I would suggest that anyone new to the forex market should spend at least 2 months trading on a demo account before moving on to real trading. During that time you should have a certain knowledge of how to enter and manage orders as well as gain experience in trading with different real currency pairs.
In the end, it depends on you. If you feel you have learned enough and can effectively trade on a real exchange, you can put some money into a real account and start trading. And if you are still not confident with real trading conditions, then stay and practice until you feel confident enough to switch to real trading.
When should you switch to a real account?
Obviously, you are looking for profitable investment opportunities when entering the financial markets. If you keep trading on a demo account, you will not be able to get rich. So if you want to safely switch to a real one, you need to have the following things.
– Overwhelming winning rate – You use the Demo account to aim for profitable investment orders like in the real market. Remember, you are practicing and the number of wins is more important than the “virtual” money you make. With a winning rate of around 70%, you should consider switching from demo to real.
– Are you familiar with the most effective capital management strategy? How much money to invest in one trade? When to use stop loss)? How do you plan to use every penny of your capital? It’s no longer a story of “Go big or go home”. Your goal is to be a trader with a solid trading strategy that actually endures the pressure of losing until your trades are profitable.
– You can control your emotions – “No arrogance in victory and no despair in defeat”. That is a lesson for any trader. When participating in real trade, you can either win or lose. When you lose real money, your emotions will be amplified many times over. Make sure that you can withstand the pressure of loss. The important thing is to make profits more than losses. And remember not to be too confident when you have a few successful investment orders.
All you need to do is choose a suitable platform to create a Demo account to experience. Once mastered on this account with a certain confidence, you can trade with a small investment account. Practical knowledge will help you “grow up” quickly. And always keep in mind that your emotions are the main cause of the difference between trading live and demo accounts.
Hope the above sharing will answer your questions about the Demo account. Thereby helping you to gain the useful and necessary knowledge to start your trading journey. Thank you for reading.
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