What is a Demo Account?

What is a Demo Account?

A demo account is a simulated trading environment that lets you practice without risking real money. It mirrors live market prices but uses virtual funds.

Benefits of Demo Trading

• Platform practice: Learn order entry, charting, and risk tools.
• Strategy testing: Evaluate setups before committing capital.
• No-risk learning: Build familiarity with market structure.
• Automation trials: Forward-test algorithms in real-time conditions.

Limitations

• Emotional gap: Lacks real psychological pressure.
• Execution differences: Live slippage may differ from demo fills.
• Discipline risk: Traders may take reckless demo trades that never translate live.
• Transition plan: Gradually move to live trading with small size once consistent.

Transition Checklist

• Journal 50–100 demo trades with positive expectancy and controlled drawdowns.
• Replicate execution conditions (sessions, spreads, slippage assumptions).
• Go live with micro size; scale only after matching demo performance.

Practical Playbook

• Define context on higher timeframes, then execute on intraday charts.
• Wait for confirmation (acceptance, momentum, or confluence) before entry.
• Size positions conservatively and place stops at clear invalidation levels.
• Adapt to session dynamics; conditions shift between Asia, London, and New York.

Common Pitfalls

• Forcing trades without alignment across timeframe, structure, and catalyst.
• Ignoring spreads/slippage during news or thin liquidity.
• Moving stops or adding to losers instead of honoring the plan.

Illustrative Example

Build a simple playbook: identify bias, mark key zones/levels, define triggers and invalidation, and pre‑set targets for 2–3R. Journal results by session and setup to refine rules. Over time, consistency—not prediction—drives outcomes.

Practical Playbook

• Define context on higher timeframes, then execute on intraday charts.
• Wait for confirmation (acceptance, momentum, or confluence) before entry.
• Size positions conservatively and place stops at clear invalidation levels.
• Adapt to session dynamics; conditions shift between Asia, London, and New York.

Common Pitfalls

• Forcing trades without alignment across timeframe, structure, and catalyst.
• Ignoring spreads/slippage during news or thin liquidity.
• Moving stops or adding to losers instead of honoring the plan.

Illustrative Example

Build a simple playbook: identify bias, mark key zones/levels, define triggers and invalidation, and pre‑set targets for 2–3R. Journal results by session and setup to refine rules. Over time, consistency—not prediction—drives outcomes.