So, you would like to try out your investing skills on the cryptocurrency, stocks, futures or other CFD markets, but without the risk of losing your money? Don’t worry, there is a solution, and that is a demo account that a lot of investing websites offer and are there to save the day.
Now, one might ask well what exactly a demo account is? It is pretty simple, an account that you open in under a minute providing your login and contact details, and use to follow the market and create your strategies. The thing is demo accounts use a simulated currency, so you will not be losing or gaining anything in real money, but it is still good for your practice. This way, you can try out different approaches risk-free, and at the end have a sure strategy on how to earn an actual profit.
A lot of investment websites are offering you this option, but it is good to know what are the ones that will give you the most. Let’s take a look.
What Are The Pros And The Cons Of Using A Demo Account
First of all, what you need to look for when trying out a demo account is the capability of enjoying various stock and the cryptocurrency market, without taking an actual risk. And the trading platform should be very well developed and constantly updated. Now, you will want to see what suits you the most. Try out different options – from trading penny stocks to commodities, while always following the charts and learning the importance of the same. Also, make the best use of out the offer trading tools and watch-lists, and use both the won and lost trading rounds to your experience. Analyzing past performance will greatly increase the chances of doing better in the future, and that is what demo accounts allow for.
Now, when we are talking about the benefits of using demo accounts there are multiple ones wherever you live:
- The most important one is that you are completely risk-free. You can’t lose any money, you just practice.
- Along with that, you will be informed on the regular price fluctuations that are actually happening on the market (thus allowing you to get the feel of how it is) and you will be allowed to even try out a broker that you might later to really deal with.
- In the end, you will be able to feel and figure out how to act when the not so well days on the market come and make mistakes and adjustments to your strategy.
On the other hand, there are few cons to the demo accounts as well:
- First of all, as you are freed of any risk you are more likely to act impulsively (with no emotions or attachment), and that can lead to This way you are following a bad habit of investing without carefully and rationally thinking about it, and you are turning yourself into a pure speculative investor.
- Also, the trading demo platform is made more lucrative than the real one is – you will be probably investing more virtual money than you would ever in real life, and thus create a false judgment about how much profit can you actually earn. Adding to this, some of the brokers might ask for at least an initial deposit, which ruins the myth of no risk involved. And while when trading in demo accounts any investment will go through, in the live game there are times when you are rejected, and that quickly becomes frustrating (something you are not prepared for).
Best Demo Accounts Platforms
- Etoro offers an excellent partners program that allows you the use of both the real money and demo account. To that, you can trade any cryptocurrencies or CFD stocks. It has all the trading tools a demo platform should have and it is pretty simple to use. You will be playing with around $10k, planning your strategies carefully and thoroughly. Also, Etoro has an excellent mobile app as well!
- Plus 500. First of all, when it comes to the demo accounts platforms Plus 500 is one of the best-reviewed ones out there – due to good competitive spreads, flexibility and wide offer of markets. And the demo account on Plus 500 never expires which is a huge plus. Also offering a good Android and iOS app, it is pretty easy to use and runs on a smooth software. An excellent choice for any of you to be investors who want to try out their luck and skill!
- IC Markets. Same as the previous one, this MT4 forex platform does not have an expiry date and is good to use in almost all the countries around the world (from the USA to Indonesia). Coming with excellent software, trading tools and good live chat support this IC Markets demo accounts option is without a doubt one of the best there is!
As you can see, demo accounts are a pretty useful thing when you do it the right way. Read some reviews, go through some potential strategies and start practicing for becoming the new Warren Buffet on the scene!