Many binary option brokers use demo accounts as a marketing element. Indeed, for novice investors, it is practically the essential tool to learn how to trade well. Experts in the field, however, do not agree. For them, demo accounts, on the contrary, only have negative effects on the trader’s mind. Zoom on the subject:
A false good idea?
It is true that at first sight, the demo account can be very interesting. In particular, it allows you to train freely in trading without having to pay fees and to familiarize yourself with the tools used in binary options. For novice traders, a demo account also offers the possibility to start trading without taking any real risks. With fictitious money already provided on the account, they can test strategies on the platform and learn what are the most effective tactics. This is certainly an advantageous solution, but it would not be so beneficial according to the experts.
Indeed, trading professionals argue that the demo account remains, above all, a fictitious exercise platform, which would not allow traders to face the reality of the market. Trading with virtual money is, in fact, not the same as actually investing your own money. On a demo account, the trader can bet without fear of losing, because it is only fictitious capital. This is not at all the case when it actually trades on the market.
Also, the use of a demo account can distort the investor’s perception, especially regarding the risks in trading binary options. Unconsciously, he may apply the same strategies and have the same attitudes on the demo account as on the real account. This inevitably has unfortunate consequences.
Gain experience with your failures
To be successful, online speculation requires knowledge of the market, mastery of strategies, reactivity, but also and above all a well-forged mind. This is one of the reasons why the demo account is no longer relevant. In order to really learn binary option trading, you need to be able to manage the risks, whereas on a demo account, there is precisely no risk involved. The trader needs to gain experience and, according to the professionals, this cannot be done without disappointment. The real dangers of trading must be an integral part of the training, so that it can bear fruit.
During transactions and depending on market developments, investors necessarily experience emotional highs and lows, which they must learn to manage in order to acquire good control. This is not possible with a demo account. On the contrary, this training tool creates a feeling of confidence that is often excessive for the trader. After making some fictitious gains, he begins to believe that the stakes will be the same on a real account and that he can continue his habits quietly. However, a change in behaviour is essential when migrating from a demo account to a real account. Also, the best option is to choose a real account from the beginning so that you can get used to it.
Don’t forget to pay attention to your choice of broker with attractive offers such as bonuses and a free demo account. After a few days of fictitious trades, an advisor can call you to invest real money. Beware of these aggressive approaches that can hide a malicious broker. Always make sure that it is regulated.
The end of free demo accounts
For all these reasons, many brokers are starting to eliminate demo accounts from their offers or, at least, no longer allow free access to this tool. From now on, it is necessary to make a first deposit to be able to use a demo account. And when you make a first deposit, you automatically commit to the portal and, in this way, open transactions. In response to this change in situation, some binary option brokers argue that the main reason for this restriction is mainly the operating costs associated with these training accounts. While others argue that given the uselessness of the instrument, it is better to spare traders from these fictitious exercises and encourage them to engage directly in real trading platforms.
On second thought, this is a win-win option for both binary option brokers and beginning investors. The latter can acquire real experience, although with real risks, while brokers, on the other hand, automatically benefit from real account openings on their portal.
Start without a demo account, it’s possible!
However, starting trading without a demo account is not necessarily inevitable.
A training account is secure and allows you to test the different tools, but it is perfectly possible to learn binary option trading without having to use it.
The first step to take is to get as much information as possible. There are now very complete trading training courses, including those offered by brokers such as OptionWeb or AnyOption. Most of these courses are completely free and are suitable for traders of all levels. From basic term definitions to strategy applications, market analyses and interpretations, all the details of binary option trading can be learned directly on the net.
In addition to ebooks and video tutorials, online seminars are also regularly given by experts in the field. You should not hesitate to subscribe to it in order to tame the field of trading. During the first steps on the platforms, it is then necessary to move slowly and improve your steps gradually. Above all, you should not be in a hurry to pocket gains, but start by applying simple strategies. Profits will come automatically when trading techniques are well mastered.