Do you know the Advantages and Disadvantages of MT4 Demo Account?
Do you live in South Africa? Then please go to HotForex ZA (South Africa) main introduction page.
HotForex offers MT4 Demo Accounts for Free.
Unlike MT4 Live Accounts, Demo Accounts has many advantages for online traders, such as:
- No risk involved
- Market Price movements are the same as live account’s
- You can practice any strategies you like to test out
- No deposit required and No fees charged
When you are not ready to trade with your real funds on Live Accounts, Demo Account may help you to gain confidence and further knowledge.
But, you must always note the demerits of Demo Accounts while compering it to Live Accounts.
These are the followings:
- Demo Accounts do not have Market Liquidity.
- Many traders have different psychological activity while trading on Demo.
1st, there is no liquidity on Demo Accounts. It means that the market price board you are looking at is only a board with no deep liquidity behind it.
This condition eliminates following situations from Demo Accounts: Slippage, Order Rejection, Re-Quotes etc…
Thus, trading results on Demo and Live accounts cannot be the same even if you trade exactly the same.
2nd, traders tend to trade differently in Demo and Live situations.
Of course, trading with your own funds or fake ones make a big difference as in how you think towards the trading. You might do things you wouldn’t do on Live Accounts but on Demo Accounts. This is another reason why you shouldn’t compere the results of Demo and Live accounts.