Live Trading Account vs Demo Account

If you are just starting out with binary options, you are sure to hear one piece of advice – always begin with a demo account. This is solid guidance as the best way to learn about this type of trading is through experience.

A demo account allows you to get precisely this without having to waste your hard earned money. You are given the opportunity to develop strategies and test them out to see what works best for you.

Now, at some point, you are going to need to make the switch to the real deal if you hope to make any money from this venture. This may have you trying to anticipate just how live trading differs from demo account trading. Here is what you need to know about these two different sides of the same coin:

There are More Similarities than Differences

There are actually a great deal more similarities than differences between a demo account and a live one. This is because you are actually working on the same trading platform as with ‘real’ trades. This means that you are conducting the same steps and analysis as you would in real life. Also, in many instances, the trades take place in real time. This means that there is no variation in what you are experiencing in the demo account than with a live account.

The Differences are Minor

Not only are there are a few differences, they are also quite minor. One of the most obvious variations would be the price feeds. With a live account, they are streaming which means they are typically on par with the actual markets themselves. With demo accounts, depending on the trading platform that you are using, you may experience lags. This means that your information is not as up to date as you need it to be. Thus, this is a plus points for live accounts.

You Are the Greatest Discrepancy

The truth is that there is not a whole of dissimilarities between the two accounts. The only unaccountable variable in the equation is you. This is because when you are dealing with real money rather than the fake version, you tend to think differently.

You are under greater amounts of pressure and you are facing real stakes. As a result, people tend to be less rational and let their emotions take over more easily. This could result in a variety of outcomes.

For instance, as there is the risk of losing real money, you may become more cautious both in how much you place as well as what you place with. This, in turn, could limit your profit potential. Conversely, after winning a few trades, you may find yourself becoming over ambitious and placing greater amounts of money.

Therefore, the main thing to pay attention to when making this switch is yourself. You should base your actions on information and experience rather than on gut feelings or erratic emotions.

This is the somewhat unusual answer to the question how does live trading differ from demo account trading. As long as you control your trading tendencies, you are unlikely to have to adjust too much.

Page Updated: 1 March, 2017