As a beginner trader, it is important to learn how to trade after receiving the trading education and one of the ways to get that practical approach to trading is by using a binary options demo account.
This is an account that the broker offers the account but the cash deposited into it is virtual money, so the trader can trade with the cash, but they cannot withdraw the profits.
The best approach when trading using the binary options demo account is personalized the account to make it feel as though it is real money you are trading with otherwise, there is a high chance that you will end up not taking the learning process seriously.
Binary Options Demo Account Cons
Binary options demo accounts are very important when you are starting up; they give you that feel of being part of the financial markets, and they introduce you to the markets as it is.
Although there are slight differences between the Binary options demo accounts and the real accounts, you will always have that virtual stance hanging above your head as a trader honing their skill on a binary options demo account.
Before binary options demo accounts came along there was paper trading and that was a lot more cumbersome but it was more engaging than trading on a binary options demo account.
The traders had to write the prices make calculations by hand, and that style of learning became more engaging, and the learning process was shortened.
Brokers from around the world have been providing the binaryoptions demo accounts to their clients in order to give the clients a simulated environment where they can practice their trading strategies, and they can get acquainted with the trading platform.
It is key to understand that the binary options demo account should be used for learning purposes only and that way you can be able to gauge your readiness for trading with live funds.
Also while trading on a demo account it is important to note your psychology too, how often do you deviate from your strategy, do you tend to repeat a certain behavior that causes you to deviate from your strategy and is you improving or deteriorating.
All these aspects can be checked when trading on a binaryoptions demo account and when you correct them or reduce the frequency of these mistakes happening you are on the road to becoming a profitable trader.
There are a number of brokerage firms in the United Kingdom that offer the best binary options demo accounts; these brokers have been building their reputation, and they have acquired a very strong backing from their clients and their peers.
Brokers like FxPro, Admiral Markets, ETX Capital, IC markets, FXCM, Pepperstone, and IG Markets offer the best binary options demo accounts, and they also have trading platforms that can share the client's results with a third party to track the trader’s performance over time.
Most brokers from other countries also offer a binary options demo account, but that does not make them the best providers for the binaryoptions demo account.
Characteristics of a Binary Options Demo Account
The binaryoptions demo account offers almost all the features of a live account but with some limitations. The binaryoptions demo account does not have a withdrawal option, and that is actually the main difference with the live account.
The binary optionsdemo account has another key difference compared to the live trading account, with the binary options demo account the client is allowed to choose the amount of trading capital they want to start with but with live funds you can only deposit the amount that you can afford to lose.
That is where many beginner traders fail; they start off with binary options demo accounts loaded with tens of thousands of pounds, but when they shift to trading live funds, they start off with a few hundred pounds.
This will definitely hurt your psyche especially if you were super successful with your binary options demo account. You need to start with an amount that is reasonable in the sense that you are aiming to start off trading live funds with a similar amount.
The other feature with the binaryoptions demo account is that you get to trade the markets as long as the markets are open, that is 24 hours a day 5 days a week.
The binary options demo accounts may have more instruments to trade than those offered on the live account, and that is why you should mostly focus on the assets that are available both on the live account and on the demo account.
The binary options demo account has another advantage over the live account, with the execution on binary options demo accounts it happens quite fast without slippages, and that may be true with some live accounts, but some will sometimes have a slippage.
This may come as a surprise to others, but the binaryoptions demo accounts simulate a perfect market environment rather it should simulate the normal market conditions.
Things to Have in Mind While Using a Binary Options Demo Account
When trading using a demo account, you should be realistic; this can be done only if you make assumptions as you trade. When you place the order to buy or sell on a binary options demo account, and you get filled directly, assume your price was not filled immediately maybe after a tick or two.
This will help you accommodate the lag when you start trading a live account. Also when trading using a binaryoptions demo account start off with a modest amount of capital, do not go all out with a big amount and start your live trading account with a small amount.
Also get involved at a personal level with your trading account, when you stick to your trading plan award yourself and when you fail to punish yourself. This will improve your trading performance and get you ready for your live trading journey.
