Table of contents:
- 1 Uses of a Demo Account:
- 2 OlympTrade Demo Account presented
- 3 How to Make Effective Use of your Demo Account
The importance of a demo account to a trader’s trading trajectory cannot be overemphasized.
By way of introduction, a demo account is a type of trading account which is filled with virtual money.
This account is provided by a broker to traders using its platform. With a demo account, you can make trades and do almost every other thing that you do when using a live trading account. However, you cannot withdraw the fund or whatever profits you make with the account.
Nevertheless, as you will see, a trading demo account is a must-have. See the screenshot of the Olymp Trade demo account:
Uses of a Demo Account:
Listed below are ways in which the demo account has proven invaluable:
1. To Practice Trading Skills
For newbie traders, the demo trading account allows you to put to practice whatever trading skills you might have learned.
Here, you are trading real-life market situations but with fake money, without any risks coming whatsoever on your part.
2. To Test a Trading Platform
Before you sign up with a particular broker and commit your capital to it, you may want to test such broker out.
There is no better way to do so than with a demo account. With a demo account, you get to know how trading works with the broker; the instruments that you can get to trade with the broker; or whatever currency your trading account will be denominated in. With these, you can easily decide if the broker is worth it or not.
As such, it is recommended that before you register with OlympTrade, you first use its demo account for some time.
3. To Test a Strategy or System
Even as an experienced trader, you will still very much need a demo account. From time to time, you will develop or come across new trading strategies. Even, you will need to test their effectiveness or profitability before you commit them to your live account. Your demo trading account gives you the best opportunity to do so without incurring any risks.
OlympTrade Demo Account presented
Olymp Trade provides you with $10,000 to be able to demo trade.
To get this demo account, you go to OlympTrade Website (https://olymptrade.com/) either on PC or mobile and undergo the simple registration process. You can also register directly from the OlympTrade mobile application available on both Google Play Store and Apple App Store. The demo account is available in multiple languages.
One good thing about the Olymp Trade demo account is that you can replenish it back to $10,000 if your account goes low.
Also, it can be traded on MetaTrader 4.
Difference between Olymp Trade Demo and Live Accounts
Apart from the obvious fact that you cannot withdraw whatever profit you make from the demo account, only a few differences exist.
The only significant feature that is available on the live account but not on the demo account is the ability to do long-term trading. With the demo account, you cannot enter trades with more than 1-week maturity. To do that, you need a live account.
How Long Should You Stay with a Demo Account?
While there is no specified amount of time, we recommend that you stay with your demo account until you have sufficiently mastered the basics of trading and your OlympTrade trading platform; also, it is recommended that you should have executed a large number of trades and have stayed consistently profitable in them. This may take months or in some cases, even years.
How to Make Effective Use of your Demo Account
To get the best out of your demo account, you should pay attention to some tips. They are outlined below:
Trade with the mindset that the demo account is different from a real one
We mentioned above that the market conditions under which you trade a demo account are exactly the same as when you trade with a live account. That is true. However, there are still very notable differences.
For one, the virtual money you are given when you open a demo account is quite unrealistic from what you will get to trade with when you want to open a demo account. Typically most forex brokers give you capital ranging between $5,000 to as high as $100,000. With this, you can take significant risks, and make use of substantial lot sizes. However, when you want to open your live account, we don’t think you will want to put up as high as $10,000 or more to start up.
As such you should not trade your demo account with the mindset that that’s the way you will go about trading a demo account.
You can work around this by seeking out a demo account with capital that is close to what you intend to put into your live account.
Similar to this is the psychology involved in trading a demo account as against that which is engaged in trading a real account. When trading a demo account, you don’t have any emotional attachments to the trades. However, when your hard-earned capital is involved, you get emotionally attached.
Use proper risk management
Similar to the above, to make fair use of your demo account, you have to adhere to the same rules that apply to a live account. One of such is adhering to proper risk management rules. Just as you will do with a live account, it is recommended that you do not use risk more than a reasonable percentage of your capital for every trade you make. We recommend that you do not risk more than 2% of your demo trading account per each trade. With this, you will have enough in your account which you can use to make more trades in the future.
You must think about in each trade in terms of risks involved and not the potential gains. What this means that you should first consider how much you stand to lose for each trade than how much you tend to gain. In other words, first calculate how much you will lose if a trade moves against you, and decide if you will be comfortable losing as much amount; rather than the potential profits that you will derive.
Take records of everything you do
One powerful tip to getting the best out of your use of a demo account is to record your demo trading activities.
Things to record should include which trading strategies you employ as well as the outcome of the trades you entered using that strategy.
Conclusion: The Olymp Trade Demo Account is an important tool
When you start trading with Olymp Trade you should definitly use the demo account as a beginner. If you are not sure if you should start with Olymp Trade the practice account will help you to make the decision.
It is a free account with virtual money. You can trade without risk. Try out new markets or even strategies. A demo account is a powerful tool for beginners and even advanced traders. Before you start with real money you should makle profits with the demo account. In conclusion, Olymp Trade is one of the best brokers for online investments and that includes also the offering of a demo account.
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