Most inexperienced traders are advised to begin trading using a demo account. While this may generally be a wise move, it's not always a good idea to demo trade all the time. In this article, I will discuss the role of demo trading, and its implications for everyday retail traders like you and me.
What Is Demo Trading?
Also known as 'paper trading', demo trading is essentially trading without using real money. Typically, this involves signing up for an account which tracks how much a trader would have profited or lost if he or she had traded with real money.
Is Demo Trading Always Advisable?
Generally, demo trading is a great place for new traders to familiarize themselves with the trading platform of their broker of choice. I've made many silly mistakes when I was demo trading and I'm glad I didn't have to pay for my mistakes with real money!
You definitely don't want to enter into a long position when your intention is to enter short. Sounds unlikely? Believe me, there are more traders that have made this mistake then they would like to admit.
A Demo Account can also be use to test Forex Trading Robots like Forex Autopilot Just to see the effectiveness of it.
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