Friday, January 25, 2013

Trading Forex online? Disadvantages Using a Demo Account

I visited the website Article Base; a free article base allowing users to publish their articles on blogs, websites etc. I read the article “Importance of a Trading Demo Account by Jemsh Smith”. In the article is the advice to test different demo accounts and find the differences among these accounts.

During the last year I have read several articles describing the use of demo accounts. One of the disadvantages against demo accounts is that it is not real money and the trader has nothing to lose. If he instead opens a real account he will feel how it is to trade with real money. The trader will feel how his emotion will start to interfere with his decision.

Just to illustrate the thoughts in the articles I found a YouTube video where a fellow is telling about the disadvantages using a demo account.



Emotion in a trade is bad for the decision a trader makes and should be avoided. It could be done through trading rules. The purpose is to lower risk in a trade. The topic is further described in the article “Trading Forex Online? What Is Risk Management and Risk - RewardRatio? “

It is also possible to avoid emotion in a trade through visualization. The purpose is to get comfortable with the trading rules and learn to trust them. The topic is further described in the articles “ Online Trading? How Visualization Techniques Can Improve Skills To EnterA Trade “ and “Forex Online Trading? How toImprove Your Forex Trading With Visualization Techniques

In the video the fellow talked about opening a real account and start trading with a minimum amount and the risk would be minimized. Another solution is finding a trading platform that offers a sign up bonus and start trading with the bonus. In the article “Trading ForexOnline? Trade Smaller and Make More Money” is described how a smaller amounts could generate a better profit margin than larger amounts.

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