DEMO vs REAL: what to choose?
@DavidTraderSignals
Traders are usually divided into two categories:
●those who, after two successful trades, start trading on a real account;
●and those who have been trading on the demo for YEARS (!), feeling insecure.
Both are extremes. And you and I need, as in everything, to look for a middle ground. Of course, everyone learns at their own pace. Someone needs a little more time for theory, and someone is already ready for battle right away.
A demo account versus a real account is an eternal dilemma for many traders, especially for beginners. Both options have their advantages and disadvantages, and the choice depends on your goals, level of experience and trading strategy. Let's figure out what a demo is, what its advantages and disadvantages are, and why you shouldn't stay too long on it.
Demo account or real account: which one should I choose for trading?
A demo account is a virtual money account that allows you to practice trading without the risk of losing real money. This is a great tool for beginners to learn how to trade and understand how the market works before you start trading with real money, but you shouldn't abuse it, that's why:
● Lack of emotions. You trade virtual money on a demo account, and therefore often do not experience the same emotions as when trading on a real account. This can lead to a misperception of risk and inconsistency with real trading.
●Lack of real financial results. Trading on a demo account does not bring real profits or losses, so you cannot assess your effectiveness in real market conditions.
●Insufficient attention to risk. When you trade virtual money, you may not pay due attention to risk management, which is a key aspect of successful trading on a real account.
●Lack of learning from real mistakes. Losing real money in a real account can be a hard lesson, but it can be the most effective way to learn. Therefore, trading on a demo account may hinder your learning, as you do not experience the real consequences of your actions.
Switching to a real account: when and how to make this decision
And how do I know that I'm ready to switch to a real account? Catch a few signs:
●The first and perhaps the most important sign is the success of your trades on a demo account. If more than 60-70% of your trades are profitable, this already indicates that you are on the right track. Of course, you cannot rely entirely on this criterion alone, but this is one of the first signals that you have mastered the basics of trading.
●The second sign is the steady growth of your deposit on the demo account. If you manage to increase your budget without having to constantly add additional funds to it, it speaks to your ability to control risks and apply the right strategies.
●The third feature is related to your indicators and strategies. If you have found your “working” indicators and strategies that bring you stable profits on a demo account, then this is another signal of your readiness for real trading.
●The next sign is knowledge of the rules of money management and risk management. If you have learned the basics of these important aspects of trading, then this indicates your responsibility and willingness to control your investments.
●And finally, the last sign is your emotional state and lack of FOMO (fear of missing an opportunity). If you do not succumb to excessive emotions, are able to control yourself and do not make spontaneous decisions, then this indicates your psychological stability and readiness for real trading.
If you have all these signs, we can congratulate you – you have spent enough time on training and are ready to start trading on a real account. However, do not forget that real trading carries certain risks, so it is recommended to start with a small amount and gradually increase your investments as confidence increases.
Don't forget that a real account is a way out of your comfort zone. If a demo can provide a calm environment and does not bring such emotional sensations, then a real account can cause stronger emotions and influence future trading decisions. Be ready for this and always keep a cool mind!
We wish you successful and profitable trading!