Trading on Demo Accounts is beneficial as they allow traders to learn about the financial markets, expand their vocabulary of trading terms, assess various trading strategies, and become comfortable with the functionality of the trading platform that the brokerage they use is providing. The main advantage, however, of Demo Accounts is that they do not require traders to invest their own private funds into these accounts just yet thereby limiting risks associated with trading. This is because they employ the use of borrowed “pretend” funds to invest with, provided by the brokerage. This however brings with it draw-backs and limitations, as Demo Accounts do not always let traders open all types of positions on all available assets or even sometimes limits the number of positions they can open. This way, brokers entice traders to register for Real Accounts through which the full potentials of trading with them are opened. This article will discuss how to successfully switch from a Demo to a Real Account and stop you from transitioning too soon or too late. Additionally, we will go over a few of the features of both types of accounts, with primary focus on the factors that influence the best time to move to a Real Trading Account.
Whether you are a novice or an experienced trader, with LegacyFX’s Demo Accounts, you can learn more about what we have to offer and safely start trading. First and foremost, our Demo Accounts come equipped with up to 10,000 USD in “balance” that can be used to open positions and test our system out. Such a surplus of “pretend funds” allows our clients to truly practice their trading abilities and explore what our brokerage has to offer. Unlike other brokers, however, our Demo Accounts are not only risk-free through our given “pretend capital”, but also afford one full access to all our features and functions, just like they would get with our Real Trading Accounts. This is because we employ the regarded third-party trading platform MetaTrader5 (MT5). With the help of their One-Click Trading option, you can easily open positions with just a single click. They also offer various technical analysis tools such as nine chart structuring techniques and more than twenty-one timeframes.
Opposingly, our Real Accounts, require clients to deposit actual capital with us. Yet, with a low minimum deposit requirement, we maintain an easily accessible system for all users. The real advantages however come when users deposit larger amounts and bolster their account status to one of our seven account types. Depending on the deposited amount, clients can have their accounts be labelled anywhere from Standard, Bronze, and Silver, all the way to Platinum, Premium and even VIP. Each account type offers their own list of perks and benefits, with the list growing the higher you go.
When transitioning from a Demo to a Real Account, two types of traders can be distinguished. Some people move to a Real Trading Account too soon out of impatience, while others do so too late. As an illustration, the first type just started trading, quickly made gains, decide to move to a Real Account, yet ultimately fall short. On the other hand, other traders have already sufficient market knowledge, but continue to trade on practice accounts out of fear. Neither situation is ideal as all investors need to know when the right time is to “take the training wheels off”.
For the first scenario, these traders believe that they are ready to invest their own funds and jump into the “deep-end” too soon. This namely comes due to their lack of preparation, market knowledge, and understanding of financial markets. LegacyFX helps such traders combat this from happening by providing our users with extensive educational resources to help them better comprehend the world of online financial investments. Such resources come in the form of our e-books, videos, social media informative content, as well as analysts and experts who convert financial market jargon into more colloquial language that is easy to comprehend.
LegacyFX helps tackle the second type of scenario by offering users the ability to begin their investment journey with small amounts of capital. This is because many in this situation act rashly or too eagerly and open or close positions as soon as they begin to lose or generate earnings. To avoid this, we encourage our users to employ our Risk Management measures such as Stop-Loss and Take-Profit actions, to help mitigate risk and limit losses.
Experts believe that before beginning to invest one’s own capital, i.e., switching from a Demo Account to a Real Account; every investor should consider the following: the broker’s trading terms, how much losses they can sustain, establish practical risk management skills, and maintain their emotional reactions to various situations.
When using a Demo Account, take the time to become familiar with the broker’s trading platform’s features and be mindful of the trading conditions set forth, such as the lot sizes, spreads, and margin requirements.
Since forex trading is complicated and challenging, it is impossible always to be correct and place solvent trades consistently. Losses are inevitable, so therefore one must be prepared for such occurrences. As such, it is advised to only invest amounts you can withstand losing and not overextend oneself.
It has been found that employing proper risk management skills accounted for 50% of lucrative trades. Brokers that offer clear rules that alert you when your losses are significant and when you have traded excessively tend to fare better amongst users looking to limit potential risks when trading.
Earning can fuel sentiments of joy whereas losing can have the opposite effect. As such, it is important for all investors to understand the intricacies of trading psychology before moving over to real accounts. This way, traders can understand the drive behind their actions and adjust their emotions and reactions accordingly.
Overall, Real Trading Accountstypically offer distinctive features depending on the required initial deposit. Based on one’s needs and specifications, traders can choose from the account type that is most suitable. For instance, with LegacyFX, one can start trading with a $500 minimum deposit to create our Standard account. Through this account you will gain access to our daily opportunities, trading academy, private social channels, as well as tips, tricks, and support. However, one would need to invest larger sums in order to open the full slew of resources we have to offer. Yet as mentioned earlier, the functionalities available on our Demo Accounts are not lacking. This ultimately allows you to take the needed time to practice and ultimately decide, at your own pace, when it is the right time to begin trading via a Real Account.
Click here to find out more about accounts at LegacyFX.