Practice or demo Accounts are underrated in the sense that not many traders realize their importance. Most traders see it as a way of testing out a broker, before depositing money.
Instead, you should consider demo accounts as a practice tool, where you keep trying different strategies and see what works best for you. It won’t matter if you fail a hundred times, because the funds are not real. Everything else including the market conditions, price charts, etc. are real. In this way, you can keep your emotions in check while sharpening your trading skills.
However, some demo accounts are limited, by either time or funds.
It cannot be stressed enough that adequate knowledge is the key to success in any form of trading. In binary options, you have to completely familiarize yourself with concepts, such as in the money, at the money, out the money, expiry time, strike price, etc. These are the very basics of binary trading. Jumping straight into trading without education and research is exactly like driving a car without knowing how to do so. You will eventually crash and face the consequences.
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If you are new to binary options, demo accounts can be a great place to start. While you may understand the concept of trading, actual trading with real money can be a daunting prospect. For the inexperienced trader risking your own money can be a nervous time and as such we highly recommend using a demo before you feel confident trading real money.
Not only is it an excellent plan to start practice trading with virtual money for novice traders, but a demo account can also be a real benefit for those who are switching brokers. What better way to check out that new broker and get to grips with a new trading platform than doing so without risk.
Head on over to a broker’s homepage and click the “Try it now” button or “Start Now”. The way most demos work is simple; the broker gives you a set amount of virtual money to play with; $10,000 is a popular figure.
You then use this “money” to explore the platform; placing as many or as few trades as you wish. Losses and gains are credited to this virtual, dummy balance. So is it always safe to sign up? At the very least, the process tends to involve submitting your email address and specifying a user name.
If this is the case with your broker, then you probably know that opening a demo account is an easy process, which does not require much information.
Opening your demo account is quite straightforward. You visit the main website of the binary options broker. Usually scattered around the homepage of the broker are banners carrying messages like “Try it here”, “Click Here to Open An Account for Free”, “Start Here”, and other related messages.
You click on this to go to the demo account opening page; you enter the required information which is typically your email, your desired username and a password.
If you intend to use the demo account app on a mobile device, it also usually involves downloading the company’s app. Bearing in mind that it’s never a good idea to hand over personal information blindly – or download software from an unknown party, it’s advisable to do your homework first.
What can you gather from independent reviews of the site? Where is it based? What do actual users have to say about it? Even though it’s just a demo, it’s still important to know that you’re in safe hands.
Be especially wary if the demo sign-up process takes the form of a data-mining exercise – i.e. if you are encouraged to provide large quantities of personal information. There really should be no need to provide bank account details at this stage; if the platform is requesting this and you are (rightly) uncomfortable with it, there are plenty of other platforms out there that don’t require this information – so consider looking elsewhere.