A binary options demo account works in the same way a simulator does. Therefore, its very nature makes it perfect if you are not so experienced in the trading game and need some practice before you invest actual money and start working the field. Yes, you heard it right. A demo account allows you practice safe betting without the risk of losing any money. How good does that sound?
Now that we’ve got your attention, here are a few more details you need to know about the binary options demo account.
Why Should You Trade with a Binary Options Demo Account?
The first reason is that all the experts agree on this one idea. A trader should spend a considerable amount of time trading binary options on a demo account before they start the real deal. It will allow you not to risk any money until you learn to do it properly. We believe that should be reason enough, because losing money is never a good idea, especially on something you were not trained to do.
You can achieve the impressive goal of trading without losing any money by opening a binary options trading account. The brokers on whose platforms you have done this will allow you to trade safely and will not charge you any money in the process.
Apart from that, their websites also come equipped with videos, tutorials, and guides. All of these will help make you the best binary options trader you could possibly be.
Tip – instead of limiting yourself to only one account on a single platform, you can go for multiple accounts on several binary options platform. You will then have the unique chance of assessing all of them and comparing them. Thus, you can find the one which suits you, your needs, and your knowledge best. After you’re done, make sure you locate the broker that captured your attention most and stick with it.
Don’t be afraid of overstaying your welcome, so to say. There is no such thing when it comes to binary options trading, even if we are talking about demo accounts into which you are not putting any money. Once you get started and acquainted with the process, you will find that all the brokers available on the market are actually pleased to have you as their trader, even if it is for a mock-up thing.
It’s a win-win situation. You get to learn the secrets of the trade and accomplish excellence in this game. They, on the other hand, get to advertise their platform, services, and tools. Evidently, their main objective is to get you to sign in and start trading some actual money after you have spent some time on their demo accounts.
What Are the Differences Between a Demo Account and a Real One?
Although this win-win type of situation seems impressive, you should know that there are some discrepancies between a binary options demo account and a real one which you need to take into account.
First of all, there is the psychological impact of which you need to be aware. The same goes for the emotional roller-coaster through which you will be going. When you trade on a demo account, you don’t use actual money. Therefore, you cannot lose. Like in a big game of domino, if you cannot lose, you have nothing to fear. Your approach will be dauntless.
However, this also means you won’t get to experience the actual thrill of putting your hard-earned money at risk. This should be something you need to be aware of when practicing on your binary options demo account. At the opposite end of the psychological and emotional spectrum are the live accounts. They can and will be nerve-wracking, especially if you haven’t learned or trained enough, and you are losing money trade after trade.
Another difference comes in the shape of replenishing your account balance. When dealing with a demo account, you can always refill it, as the money is pretend and you get as much as you want or need. You may not think this to be dangerous, but it is. Having piles of virtual money at your fingertips might cause you to act recklessly as a trader. For example, knowing you have nothing to lose can drive you to keep your positions open indeterminately. This is not how trading should go.
On the other hand, a live account has to be filled with actual money, drawn from your bank account. If you hang on to the ‘forever open position’ strategy, you will basically be exposing yourself to a great risk.
The solution here is to try to emulate real-life trading when you’re on your binary options demo account. Here is an example. If you demo trade with, let’s say, $50,000, you’ll get nowhere as far as outcomes go. That’s because the results of using this sum will be meaningless if you will then be trading $1,000 in real life.
As opposed to this misconception, you need to try and keep your demo endeavors as close to reality as possible. This idea means that your binary options demo account should be roughly the same size as the live one which you plan to use later. Experts say this will help you recreate real-life situations and conditions. Also, it’s, possibly, the only correct way to learn how to trade.
The Top Demo Accounts on the Market
Here is a short list of the best binary options demo accounts available to you on the market as we speak.
#1. Banc de Binary
They offer a free demo account for everyone with $50 000 in funds, and they are regulated by the CySEC.
#2. Trade Thunder
Their free demo accounts are available for all US traders, and they promise 90 percent in returns.
#3. Markets World
You can trade in an unlimited fashion using one of their free demo accounts. They offer 95 percent in returns.
You must put in a minimum deposit after which they allow unlimited trading. They, too are regulated by the CySEC.
#5. Options Click
They offer $300 in funds for their free binary options demo account, and they are CySEC regulated.
Understanding that you need to practice before you start trading using your actual money is the first step of the process. It is also, probably, the most important one, as it will keep you from making mistakes which you could have easily avoided had you only rehearsed a bit prior to starting.