One of the biggest mistakes that new traders make is that they consider demo accounts and anything requiring virtual currency to be primarily a waste of time. Some assume that they will be making big profits straight away, while others feel that they would rather have the opportunity to earn a real return and risk losing than simply observe something that makes no difference in the real world. Essentially, a lack of patience prevents them from seeing the benefits of using a demo account and in some cases, the same could be levelled at even more advanced traders.
While any potential profits made through a demo account are of course forfeited in a way – even though they never truly existed – the experience gained with virtual currency can be invaluable in allowing strategies to evolve and familiarising traders with their platform of choice.
Not all demo accounts are completely risk free. Some require the trader to have made a real deposit with their broker prior to access being granted, although this money is kept separate from any transactions that take place within the demo account. That said, it is also possible for traders to make use of some demo accounts that are completely free to try, and while they are relatively rare, we have listed some of the better options below.
The Inner Workings of a Binary Options Demo Account
In most regards, demo accounts with a reputable broker are identical to the real thing. They offer all of the same functionality and are based on the same market rates, with the only difference being that the money invested and returned doesn’t really exist. Naturally, a lack of risk means that the actual experience of trading is not truly replicated on all levels, but in terms of gaining familiarity with a certain trading platform, a demo account cannot be beaten.
Demo Account Limits
Most trading platforms are happy to allow their members to make use of a demo account, but they are primarily interested in real money trading. With that in mind, they often place certain limits on their demo accounts, usually in the form of time. It is not uncommon for a broker to offer a week of access to the demo platform, or in some cases even less. This is no time at all when it comes to learning advanced strategies, but it is possible to make the most of even limited time by working around it. In having a clear strategy prior to creating an account and a working knowledge of current market conditions, even a new trader can position themselves to get the best out of what their demo account of choice has to offer.
Overall, a demo account is designed to be something of a gateway into real money trading, but that is where the real fun begins. They are always worth a try but anyone that is looking to reap the benefits of virtual trading should be doing so with one eye on doing it for real in order to really get the most out of what is on offer.