Forex brokers who offer a demo account for their new traders can be doing their new members a service but, at the same time they could actually be reducing their chances of success in real currency trading. Along with Mini & Micro accounts, demo accounts have become a tool used by many brokers to attract new traders with little to no experience. These traders are much more comfortable with virtual money or a relatively small deposit amount rather than a full blown trading account when they’re first starting.

Most legitimate brokers allow for new traders to use a demo trading account. Brokers offer this practice account option so that traders are able to learn trading strategies & test out Forex software they have may have purchased. While these accounts can be very helpful, there is a major problem

Every broker I’ve ever worked with that offers a practice account automatically puts $50,000 in it, virtual money.

Unless a new trader has $50k to reallyinvest in an actual trading account, this $50k practice account can not give a trader an actual sense of what his trading experience in real time will be. $50k is a large starting investment & it may give new traders the idea that they can trade carelessly & get away with it or fail to analyze the market correctly or, worse yet, skip some of the automatic signals they may be getting from a Forex signal service.

Without using the real amount of money that they’re planning to deposit into a trading account, a new trader is unable to get a real sense for currency trading in the market.  Brokers should allow new traders to choose how much to actually “deposit” into these demo accounts so they can get real trading experience with the investment amount that they actually are ready to use.

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Daniel Smith
http://www.articlesbase.com/business-opportunities-articles/forex-demo-accounts-do-they-really-work-714535.html

Filed under: forex demo

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