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Cryptocurrencies Demo Account

Your capital may be at risk. This material is not investment advice.
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Written by trading expert:Professional Day Trader
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Short resume:
  • Author of the book Options Trading for beginners
  • Worked in finance in 12 years
  • Got a MBA in Finance, BA, International Business Administration And Marketing
  • Built a solid record of achievements through constantly developing financial markets
  • Traded on the most frequently utilized stock exchanges: TSE, LSE,NASDAQ, NYSE, Euronex Actively managed a 6-9 million dollar portfolio
  • Developed new and innovative trading systems and implemented them during trading hours
Matthew O'Connor is the author on the bestseller Option Trading for Beginners
Option Trading for Beginners - Written by Matthew O'Connor

Trading Bitcoin can be a risky affair for an investor with no experience whatsoever in this market. Trading through the use of imaginary funds can create the illusion of real trading making one feel the psychological pressure and emotions that are associated with trading real money.
A cryptocurrency demo account is a trading simulator you can use to practice trading with a variety of financial instruments including CDFs, futures, stocks and cryptocurrency. You risk none of your real investment while trading on a demo account since they are financed by simulated money. You can therefore get acquainted with the market and gain confidence in trading at no cost. A demo account can also come in handy when you need to test drive potential software or broker.

Opening a Demo Account

Opening a demo account whether for a cryptocurrency or a binary option is easy. All you have to do is go to the preferred brokers’ website and provide basic details, including your email address, username, password and location. You will then be emailed the account login details and a simple guide on how to navigate the website. You can even be lucky to find a demo account that requires no registration.

The Potential of a Demo Account

A good demo account will expose you to the realities of a trading platform and allow you to have a real experience of the markets. The only thing that will not be real is the funds you use in trading.
The following are reasons why a demo account is a great idea.
· Trading tools – Learn to use information from news feeds and interpret market data.
· Gain experience – Some activities in trading like viewing loss, tracking profit and viewing margin requirements are best to know before you venture into real trading. You will also be able to practice closing and opening positions and applying limits and stops before risking your real capital.
· Exploration – Testing different markets using your own real money can be frustrating and expensive. With a demo account you will know the difference between trading commodities and trading penny stocks and this way be able to find the ideal product for you.
· Improve Performance – With unlimited number of practice at your disposal, you can hone your strategy by correcting the mistakes you made in your past performances.
· Charting – Learn to use and interpret charts, from identifying patterns to testing technical indicators.

Limitations of Demo Accounts

While demo accounts present a significant opportunity to explore the trading world, there are certain limitations that are worth knowing.
· Execution – Demo accounts use preset (screen prices) to fulfill a market order. Due to this they have a better execution and compared to live markets presented with slippage. Projecting your calculations using a demo trade can therefore be challenging.
· Unrealistic Capital – In demo software you choose the amount to invest. Some people choose unrealistically large amounts which they would not afford in real life and which present smaller loses. This provides a deceptive outlook of what real live trading is.
· Emotions – Demo accounts will not provide you with a chance to control emotions such as hope, fear and greed that can affect the outcome in a real trading event.

NOTE: This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future. In accordance with European Securities and Markets Authority’s (ESMA) requirements, binary and digital options trading is only available to clients categorized as professional clients.
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