A Forex practice account from Tradeview Forex is a smart way to get first-hand experience about online trading. Many people who enter the industry in this way tend to spend too much time on the theory and not enough time in practice.
To get a well-rounded knowledge of trading, you need to do just that – trade! The beauty of a Forex practice account is that it’s not for keeps, and if you make a rookie mistake, you don’t lose your shirt in the process.
After a couple days of ‘playing around’ with a demo account, you’re bound to develop a familiarity with trading that you can’t get by reading up on Forex trading alone. But there’s a risk in spending too much time playing with demo accounts and putting off moving up to the real deal.
Compared to a live trading account, a Forex practice account can be too forgiving. The reason why is often due to trader psychology. With a demo account, you’re more likely to take bigger risks – and potentially make bigger ‘profits’ –if you know you’re not trading with actual money.
New online Forex traders tend to be much more cautious when they first begin trading online with currency. New traders tend to take less risks, as there can be consequences for making the wrong move, and this can have an effect on the strategy that brought success to the trader when they were using a Forex practice account.
Another issue that can effect real trading less than it does a Forex practice account is in the order execution. Demo accounts are always handled by a computer. But for real trading, a dealer is most likely involved in execution of your trades. If your trade is bigger than the minimum, or if the market is more volatile than usual, your trade can take several minutes to execute, and is not instantaneous like in a Forex practice account.
The best strategy is to be aware that your trading behavior will change once you move from a demo account to a real one, however unintentional this change may be. Another rule of thumb is to be mindful of any execution delays that may affect your trades. In this way, you are more likely to become a successful real-life Forex trader.