Forex Demo OR Live Account? Which One Is Better For You?

Without practice, there is nothing you can do to achieve perfection in any stream. The same is applicable for forex trading as well. Most of the traders deposit their capitals with the forex brokers hoping that their investment might generate profit overnight. However, soon you might realize that trading in forex isn’t easy. Unless you practice properly, trading cannot be something that gets you to benefit. Even though you are new to the field of trading or have been trading for quite some time, practice never stops.

Forex Demo OR Live Account?

Which Is Better: Demo or Real (Live) Accounts?

If you are someone who has traded in both demo as well as live accounts, it is hard not to notice the differences between these two. When you trade on the demo account, you can notice that it can be executed without any kind of problems. However, when you initiate your trade with live accounts, you might see that your orders can be delayed or not filled sometimes. This is because of the vast difference in the trading environment where the demo account simply prepares you for the real-time market in live trading accounts.

Here are some of the key differences between the demo and real trading account:

1. No Re-Quoting In the Demo

Demo accounts tend to offer a controlled environment to help people practice way before indulging in a real-time trade scenario. However, when you trade in a demo account, you don't get re-quoted but in the real account you have to sustain the re-quotes and have to accept it with no option as the trading scenario in real time is harder than demo account environment.

2. Tighter Spreads In the Demo

When you compare the spreads in a demo account with the live trading account, you can easily find that the difference is close to 1 pip. This difference is rather evident for someone who has been trading with the help of spread brokers with variability. This is where market conditions along with liquidity providers decide spreads.

3. Perfect Stop Loss Execution in the Demo

When you trade in the demo account, every order for stop loss is executed perfectly. However, when you take a look at the traders in real accounts, you can easily notice the array of complaints related to the brokers placing the stop loss way higher than you wanted to lead to a substantial loss that is way beyond your estimation.

Demo accounts are often beneficial when it comes to opting for a trading environment that is free from any kind of risk. It helps the traders get accustomed to the market space and understand the highs and lows of the forex market. Even though the commissions and spreads differ from the live account, you get accustomed to what may or may not affect your trade.

If not completely, it closely mimics a real-time trading environment in the demo account. Additionally, the demo accounts also allow you the facility to test trading conditions that are provided by forex brokers. One can easily move towards the live account after practicing properly in free forex demo account to bring down the loss from an unexpected trading scenario.