Free binary options training accounts are a service that some traders love and others hate. Why is this happening? Surely, a free account for practice can not be bad?
Not exactly. It has its advantages, but also its disadvantages. In this article, we will look at the advantages and disadvantages of demo accounts. We have already written a lot about demo accounts, but it is always better to repeat and make money than to simply leave this important topic unnoticed.
Let’s start with practice.
For those who don’t know much about binary options trading yet, a free practice account (binary options practice account) isn’t exactly what the name implies. It gives you the opportunity to practice binary trading on the foreign exchange market or stocks for free – it sounds cool for a novice trader, and, in many ways, it is.
The main task of a broker that offers a free options demo account is to get people interested in the options market, and there is nothing wrong with that, as they exist in order to expand the number of traders using their platform for trading. This is an excellent way for a new trader to start trading in the binary trading market.
Currency trading is not a simple click of the mouse, the necessary knowledge cannot be obtained in a minute. Some brokers have already introduced platforms with a minimum deposit so that beginners can get started, and some have gone even further and provided the public with the opportunity to open free demo accounts where you can start trading with virtual money until the trader has enough confidence and knowledge about the risks that he will have to deal with when trading with real, his earned money.
This is where the main advantage of such an account is hidden, in the ability to trade binary options and learn its main functions without risking a penny! However, this is not always the case, and this is bad news.
When trading with virtual money the risk suddenly seems not so significant, In fact, the risk does not exist at all, since you have a never-ending sweat of virtual money, which means that you are likely to take risks when trading, which you would not do, and should not do, in the real world. This can plunge you into a false sense of security.
Let’s say you take additional risks for significant amounts of money when you practice, and when you have earned a significant amount, you take another, no less risky step, confidence suddenly increased dramatically, it seems to you that you can also play with your own money, risking, often, unjustifiably and without calculating the consequences.
The finons market has suddenly become exceptionally attractive. If you can earn so much just by practicing, then imagine how much you would earn if you traded with your own money? And that’s where you’re wrong. You go further, open a real account and deposit your real money.
Your confidence level is off the charts, you feel like you can do anything. You take a risk by trading with your hard-earned money, and you lose it. Suddenly, your Forex career ends before it starts, you are left with a significant loss, it seems that all the money that you have earned during the practice, all the knowledge that you have acquired is nothing compared to what burns you in reality.
Of course, if you do everything more slowly and carefully, you can avoid such a scenario, but for this you need to be able to control yourself. Then you can become a successful trader. Accounts for practice are extremely useful, but you need to trade in the same way as you would do if you were trading with your own money. Never do something during practice on a demo account that you would not do, if your real money were there!
In order to understand the situation in more detail, some brokers offer several mini accounts, where the minimum deposit amount is $ 25. Virtually, this is the same demo account, since the deposit amount is very small. However, it’s still your money, so the trades will be more realistic, so you probably won’t risk it in vain.
Tagged with: Binary Options Demo Account
