There are different types of trading accounts that most of the online forex brokers offer to their trading customers. One type of account is the live and the other is the demo account.
The difference between the two types of accounts and the difference in the process of trades involve in them are explained below.
Practice Forex Trading Accounts
The first type of trade account is the demo or the practice account where trading is done without putting any money into risk. You can start the initial steps that involve in trading but without exchanging any real funds.
Most of the forex brokers offer this type of accounts to the traders and business man to attract large number of traders. This type of demo account offers make traders to practice trade without any loss or profit results but they just can experience the trading styles. This will help initial traders to learn about the right way of trading thereby avoiding issues that arise while trading.
This type of offer makes the traders to check the services that are available with the broker and also helps in knowing all the basic strategies and plans of trading. And lastly, traders have the opportunity to check the status of the broker so that their funds are in secure hands.
Actual Forex Trading Accounts
Another type of account that forex broker offer to their trading customer is the actual account. In this type of account real money is put and may be at risk. This account offers you to deal with the actual forex trading process.
In order to open a live account in forex trading a minimum deposit of about $100 is necessary and this is one of the offers that most of the forex traders offer to their customers.
But in case of trading accounts with large deposits more services comes as compared to small deposit trading account. Large trading accounts include VIP accounts and Standard accounts.
Demo Trading Success May Not Indicate Live Trading Success
But there are both merits and demerits with the demo account that are offered by the forex traders to their customers such as traders can experienced all the trading styles and rules without any risk.
Therefore with no real money involve in this practice some traders may feel and take trading as an easy task which is actually not. Therefore by putting real money into risk traders will be more careful in handling trades with a forex broker. And hence differences may occur between the two types of traders.
So there is always a need to take into account whether the trader is learning and practicing forex trade or they are just evaluating the strategies and plans of trading involve in a trade.
Using a Micro Account Instead of a Demo Account
It may be a suggestive plan if you use some account that are based on micro level of depositing your account so that you can start trade with your real money and experience all the risk to come up rather using a demo account that the broker offer to you.
This will help you in checking and testing the type of services they provide and deals with real pricing. You can experience all these things without putting much money into risk.