It is prevalent that forex demo accounts are recommended for beginners in the forex trading world, since this account type offers features that match beginners’ cup of teas along with easy trading conditions and many other benefits. After understanding all the quirks and twists of the best demo account, these traders are ready to switch to real accounts. This is a big trademark for traders since from this point onward, they can witness and handle real trading conditions.
The multiple stages of a trader can be illustrated by the following chart:
Note: Despite seeming beneficial, demo accounts are not always the best choice for beginners. Meanwhile, Cent/Micro account has received more place in the spotlight of good account types.
The most striking advantage of demo account is its risk-free feature. Traders can use this account type to do almost anything without worrying of losing their money. Nevertheless, this feature can also, ironically, become the greatest obstacle that prevents new traders from integrating into the real trading world. Since there is certainly no point in restricting themselves with risk management plans, traders will not learn how to be careful with their calculating strategies in trading. This is also the reason why Cent/Micro accounts are becoming more prevalent for newcomers since these accounts allow traders to gradually submerge into the reality of forex trading.
FOLLOWING IS THE LIST OF THE BEST 4 FOREX DEMO ACCOUNTS
- Exness Mini demo account
- XM demo account
- HotForex demo account
- FXTM demo account
- Demo account standards
As an account that includes both Market Marker and STP accounts, standard account is one of the most prevalent types of accounts that provides many necessary trading conditions such as:
- Standard lot size
- Standard transaction costs
- Standard spread
- Standard leverage
Stability is the most significant feature that defines standard accounts. Different from ECN accounts, volatility and unstable quotes or slippages are never confronted in standard accounts. It has been quite a long time since ECN accounts are regarded as the best trading account, yet this perspective is not completely true. Only experts are capable of utilising all the features of ECN accounts, therefore new or normal traders are advised to stick to the safe route – standard account.
- The suitable account for beginners
Basically, 2 types of demo account are offered: Standard and ECN demo accounts. From my perspective, I believe the standard demo account would be more suitable for them at the initial stage before they can switch to ECN account once they have gained sufficient knowledge and experience. It is necessary for traders to grasp all the fundamental knowledge of the forex market and understand the different aspects of trading conditions before using ECN accounts.
The drawbacks of ECN accounts
According to my previous statement, the biggest disadvantage of ECN account is its volatile nature. However, I have found that ECN demo accounts are not dangerous at all, but in fact a safe platform for beginners to practice trading. This is due to the fact that ECN demo accounts are adjusted to fit beginners’ needs by replacing unstable quotes with better ones. Therefore, ECN demo account users have higher winning chance and become overconfident. In other words, this might be the strategy of ECN account types, where overconfident traders who switch from demo to regular ECN accounts would experience a radical change and lose more money.
- Demo vs real accounts
The top 10 forex brokers in the world tend to lure new traders into believing that demo accounts have similar features to real ones, in which traders will have the chance to experience the same benefits and trading conditions. However, it is a fact that those who win regularly with demo accounts will have a hard time adjusting themselves to fit the real trading world. This is simply because:
- The quotes of demo accounts are nowhere near the same as real accounts. Generally, these quotes are changed to enhance users’ trading performance.
- For demo accounts, traders can freely trade without facing any consequences since no risk is involved. Therefore, they will not be able to develop their risk-management skill.
- Traders that fit forex demo account
Beginners are certainly the best fit for demo accounts since they have no experience in the forex market and they need a risk-free platform to learn trading. Nevertheless, I believe that any traders who are serious about their path should choose Cent/Micro account from the start to learn as much as possible.
- The duration of forex demo account
According to my statement, Cent account would be the best choice for traders who want to involve themselves in the real trading world as soon as possible. An amount of $10 deposit is required in Cent account in order to experience real conditions for one to two months. Nevertheless, if you want to give demo account a try, then your learning time will be over in a short amount of time. To be frank, perhaps 3 days is enough to grasp the basic concepts of forex trading. Therefore, I would advise beginners to switch to Cent/Micro account or regular account right afterward and spend about 3 months with this account type to really understand all the trading strategies as well as to develop their risk-managing skills.
HERE IS THE LIST OF THE CURRENT BEST 4 FOREX DEMO ACCOUNTS
- Exness accounts
- Hotforex accounts
- XM accounts
- FXTM accounts