Undoubtedly, everybody who now trade on the currency exchange market Forex settled his first deal on demo account. However, there is significant difference in operation on demo and real trading accounts. Gaining trading skills, newbie, as a rule, is doing all right: every deal is more successful than the previous one, profits are going up. But as soon as things came to the real trading on the real market Forex, the situation completely alters.

The difference between demo and real trading accounts consists in real money being invested in trades. Demo account implies using virtual money. So, as a rule, a trader does not think about the responsibility for his decisions when changing demo for real account. Working on demo a trader drops a guard as he will not lose a penny. Memory quickly deletes all failures and the only thing a trader remembers is positive experience. Here is the danger, because trader feels self-confidence and desires to open a real account as soon as possible and start trading with real money.

It should be taken into account that differences between operating on demo and real accounts consists in such emotions as fears, doubts and greed which trader should overcome as they usually prevent trader from confident trading on Forex. It should be mentioned that time of activity on Demo account should be strictly measured – according to experienced traders, two or three months is not enough but long time without real trading can also lead to the negative consequences. The best way to get used to real trading and, at the same time, gain experience of understanding the market is start up a real trading account and continue working on demo. The situation on the market which you understand and forecast perfectly will bring you profit from real account and self-confidence on Forex.

The realization of holding a real account will stimulate trader to get into the analysis of the market. Of course, everybody has ups and downs, nobody is exclusion. Eventually, trader feels professional changes; experience will bring him a profit.

Nobody will force you to open demo account first, but you should keep in mind that real account reckons high level of knowledge and experience of forex trading, so if you are a novice trader it is better start with demo account.

Added by InstaForex Staff