Reasons why demo trading is bad for a forex trader

Reasons why demo trading is bad for a forex trader

Forex trading is gaining clients right, front, and center every day. This is made possible through forex trading platforms that have an online presence. The online space is recruiting forex traders at a tremendous.

People who did not even have a clue of what forex trading ends up enrolling it after being enticed by the many advertisements and great explanations of how one trades forex. Forex trading platforms have it all worked out through their social media sites where a potential forex trader can easily register with them. In cases where one needs a deeper explanation of how to go about it, they have people ready to chat with their prospective clients.

3 Reasons why demo trading is bad for a forex trader

Demo trading accounts help forex traders get the gist of the trading. But as the saying goes, “All that glitters is not gold”. There is hence a negative side of it in that demo accounts have their bad side. This article will explore three reasons why demo trading is bad for a forex trader.

Demo trading has no consequences

 When a forex trader gets into the forex trading business they expect results. Forex trading is where people exchange foreign currencies and gain from the rates that are in the forex markets at the time the trading is taking place. It is a business that can bring forth a win or loss.

However, when a forex trader trades using a demo account they expect no result. There is no winning or losing that emanates from using a demo account because it is a fake account. A demo trading account simply helps a forex trader know how forex trading is done.

It is an account that gives a forex trader tips on what to do during a live trade. Demo accounts are mostly used by people who are just joining the forex trading business. Live trades require a forex trader to have a real trading account with real money.

The fact that a demo trading account is a fake account is proof that demo trading has no consequences to a trading game hence it is deemed bad for a forex trader.

Demo trading has no emotions

Emotions get to be part of the forex trading business in that a forex trader will be anxious about what outcome a trading game he or she is participating in will bring forth. For instance, if a trading game brings forth a win, a forex trader is left happy and will be psyched up to continue trading forex.

On the other hand, if a forex trader loses, they get to be emotionally drained because they lose money from their trading accounts in proportion to the trade they had placed. It is for this reason that demo trading is bad because it has no emotions. A forex trader will set apart their emotions when demo trading because they have not invested not a single dime in the trading game.

Demo traders gamble

As much as a forex trader will get a lot of insight about forex trading from demo trading, demo accounts in one way or another do not portray the real truth of forex trading. Forex trading companies provide demo accounts to forex traders and therein they try out how forex trading is done.

If a forex trading company is out to retain a client, they might have mechanisms of making a forex trader stick with them or even refer other people to them. This emanates from frequent wins through demo accounts. If a forex trader is not wise and gets over-ambitious, they might end up investing as much as they did through the demo accounts in their real trading accounts.

In most cases, comparing outcomes of a demo account to that of a real trading account might disappoint a forex trader in the long run. If a forex trader tried out different risks through their demo accounts and in all they won, they would want to do the same through their real trading accounts.

That could work but in real trading accounts, the outcome might change and bring in losses. The frequent trials by a forex trader in pursuit of a win show that he or she is a gambler.


Demo trading is great but bad as well especially because it is just for trial purposes. A forex trader must keep in mind that demo trading should not be treated as though it a live account because it is a fake account.