Many beginning traders often ask the following question: “If there is a difference between the work with a demo and a real account?” Yes, there is a difference and it is rather essential. There are many reefs that every beginning tarder meets when he/she opens a real account. Unfortunately many brokers do not tell about possible worry that expect for a trader in the real work.
The nuances of the trade that differ demo from real can be divided into three basic groups:
- technical
- psychological
- special (the theme that is not preferable on different forums)
Now let’s see each of this groups more detailed. We will start with technical moments. The main difference is that on a demo account all the transactions are arranged automatically by a computer. On a real account a real person (a dealer) stays behind every transaction. I.e. on a demo account you just click on the button “buy” and the transaction is arranged, and there is no matter of what is going on the market at the moment. On a real account you give an order for arranging transaction to a human, so everything is going on not so fast. It takes the dealer some time to work up the information and to make a decision. Sometimes it takes about one minute. If a trader is used to work with a demo account (for example when there are sharp fluctuations of prices) then this trader just will not have time to open transactions on the price that he/she needs. While the dealer is working up the information, the price will be changing constantly.
Psychological factor is important too. Almost all traders meet this factor. I.e. trading on a demo account you can easily increase your account during a month. But you start working with a real account and you can not do that. The balance is either zero or is in minus. Why? There is an example which will help you to understand why. “A teacher reading a lecture on psychology puts rather wide board on the floor and offers the students to walk along the board. Every student gets 100 dollars for that, and everyone agrees of course. After that the teachers offer to throw the same board from the roof of one building to the roof of another building. The teacher offers 1 000 dollars to that one who walks along this board.” How do you think if a lot of students would like to do that? As I know, no one agreed. But the board is the same, so why it is so easy to walk along it when it lays on the floor and so difficult when it hangs on the height of 3 000 meters? The answer is simple – when the board is on the floor you do not runs any risks. The same can be said about trade. Working with a demo account you do not run any risks. But when you open a real account and invest your hard earned money to it you are afraid to run risks.
As in any other sphere of our life foreign exchange market needs some education.
Of course, you can start forex investment and get quite successful about it. But sooner or later the losses will come. This is when you might think “Why didn’t I start with a good forex trading education?”
That does not mean that after reading even the greatest materials you will start closing trading positions with huge income, but this info will save you from many troubles. And even if you make up your mind to get the assistance of a managed forex trading service, still you will make a much wiser decision.
And some general tips – today the Internet technologies give you a really unique chance to choose exactly what you want at the best terms which are available on the market. Funny, but most of the people don’t use this chance. In real practice it means that you should use all the tools of today to get the info that you need.
Search Google and other search engines. Visit social networks and have a look on the accounts that are relevant to your topic. Go to the niche forums and participate in the discussion. All this will help you to build up a true vision of this market. Thus, giving you a real opportunity to make a smart and nicely balanced decision.
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