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The Pros and Cons of Dummy Accounts

It’s not easy starting off as a trader because there are so many aspects of your life that inevitably will have to change. Nobody can stop you launching yourself on this brave new world, out to outwit the market, with your carefully assembled capital very much at risk and in the space of a few hours thousands of your dollars go down the Suwanee because of a naïve error, made in a moment of rash enthusiasm by someone who was just too eager to get going as a trader.

Given these circumstances it is hardly surprising that one popular antidote to this rush of blood by new traders is the adoption of a demo forex account. This has been best described as a kind of virtual training program which allows entrants to the field to fly with complete safely in what amounts to a totally risk free environment. This dummy account gives rookies an opportunity to practice all the skills of a trader and acquire familiarity with the trading format and encourages the development of some basic trading strategies.

Having an account like this is a wonderful introduction to the life of a trader. Firstly it costs nothing to set up and the only information that is required is your name, address and a valid phone number. You can learn the lessons of trading in forex and not risk as much as a single dollar.  What is more the programs that are available are all based on the kind of situations that you would experience in real time forex trading so this will boost your familiarity with system controls and the ways that currencies fluctuate in price.  And all this is being done with the forex equivalent of Monopoly money!

Use this experience wisely, learn to adapt to a market that can and does change both rapidly and frequently for a wide variety of reasons.  Develop new trading strategies and use them to create the business plan that will shape your approach to trading when you graduate to “real money”.

So far so good.  But as in nearly every aspect of our lives today, as ever, there is a downside which needs to be considered. We just talked about Monopoly money but let’s be honest, only the most dedicated players really worry about losing a game.  In the dummy trading world you have been doled out large sums of imaginary cash and you are quite likely to be unworried about any losses.

The fact is that the real key to success or failure as a forex trader rests to the extent that one can control your very basic and understandable human emotions.  Let us imagine that during your period of playing the markets on a demo basis, you have been a model of moderation and care.  Boosted by your record, you start for real and confronted by one of the most precarious markets in the world, suddenly everything goes wrong and the losses start to mount. That is when you have to keep your head.

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