After selecting the very best Forex trader, you will need to start a Forex trading account with them. The procedure is easy and requires choosing an account type, registering and activating the account.
Most professionals and professional Forex traders generally advise novice Forex traders to first open a demo account before moving on to live accounts.
Demo Account Vs Live Account
Live Forex trading accounts are serious accounts where Forex is traded in real-time. Here, Forex traders order and sell Forex using money that is real. In a live trading account, one may often make profits or perhaps losses depending on the trades of theirs.
Demo accounts are virtual simulated Forex trading profiles complete with all needs as well as environment very much like a living trading Forex account. The only difference is the fact that no real cash is traded, earned or perhaps lost.
Here the trader can buy as well as sell Forex and make profits or losses but no real money is actually exchanged. The primary aims of demo Forex trading profiles is to;
· Help new Forex traders learn how you can trade Forex without risking their money
· Gives traders a real-time experience and feel on how you can trade in Forex
· Help traders try out different strategies and think of useful strategies for live trading
· Used by new traders to build confidence and motivation before moving to follow trading account
Difference between demo Accounts and Live Trading Accounts
In practice, it’s been found that successes achieved when trading in a demo Forex account could differ significantly with those from a live trading account. This particular big difference in outcomes is attributed to a number of factors including;
· Lack of real cash mindset
· Emotional differences
· Risk and caution
Lack of Real Money Mindset
Because there’s no money lost in demo accounts, traders are apt to have a mindset of getting nothing to lose that make them try different strategies which either fail them or result in success. Also, there’s no pressure in case they make expensive trading mistakes.
In live accounts however, with no trader is willing to try out a strategy which they have not used before for fear of losing the money of theirs. In case of trading mistakes, traders feel the pressure to recoup their losses hence clouding later judgments.
Even though Forex traders try to eliminate feelings when creating Forex trading choices, trading in living accounts could at times lead to nervousness along with a flood of emotions to traders as they start to be tense when making such crucial decisions.
This’s because wrong decisions will result in them losing money. In demo accounts, you will discover no emotions in play.
risk and Caution
While in demo accounts taking risks and being less cautious might end up making more profits, fresh accounts traders are less prepared to take risks and are quite cautious on the trades they make.
In live trading however, possibility of traders making more money can end up in taking unnecessary risks. Risks in live trading might result in committing trading sins like cutting off your winnings, revenge trading and moving stop-losses
This differences between live and also demo trading accounts may be sorted out by reducing trading mistakes as well as sins, concentrating on your trading weight loss plan rather than the money when under pressure and also being prepared for emotionless state of mind when you switch to live trading.