A lot of people new trading use Forex demo accounts when they first start trading. I am not a massive fan of Forex demo accounts. The purpose of this blog post is to discuss:
The problems of Forex demo trading
Why Forex demo trading is so different to live Forex trading
How to overcome the problem of Forex demo trading
Problems of demo trading
Quite a few people who are new to trading Forex demo trade a strategy successfully but when they come to trade it live, their profitability suffers considerably. Quite a few traders find this to be a problem.
Why demo trading is so different to live trading
There is a simple reason why people who trade on a Forex demo account do not get the same results when they live trade. When you trade Forex on a demo account, you cannot replicate the emotions of live trading with your own money. People trading on a Forex demo account tend to be much braver than when they are trading on a live account. Even if you trade with small stakes you will notice your emotions are much different to when you demo trade. Therefore I would advise against demo trading.
How to overcome the problem of demo trading
So instead of demo trading I would suggest you need to trade live, albeit with a very small stake. That way you experience the emotional side of trading but you trade with very limited risk. A Finspreads beginner account is ideal for this. The beginners account allows you to trade from as little as 10p a point. Therefore you can trade at a very low risk while also getting a feel for the emotional side of trading. Once you are comfortable with 10p a point you can slowly increase your stake. Then when your ready you can upgrade to a standard account with a minimum stake of 50p. Once you are confident enough you can then move on to the more popular brokers such as IG and Capital Spreads which have a minimum stake of £1 a point if you do not like the Finspreads platform.
You can get a Finspreads beginner account here:
There are other spreadbetting companies out there which do small stakes but Finspreads was the first I came across when I was researching for this blog post. I funded an account with £100 and traded it on a 15 min chart for a few hours and it was a good platform. I also liked the fact it was a “beginner account”.
This is a great way to learn trading with extremely low risk.