All traders should start their forex trading journey with a demo account. Demo accounts are a simulation of the forex market and allow you to adjust before you use your own money on the market. All Australian forex brokers will have demo accounts that you can use. These accounts also help you get used to the trading platform that your Australian forex brokers have. Of course, there are a few differences that you have to know about when you look at live and demo accounts.
Which Account You Are Trading On
The biggest difference between a demo and live account is what you are going to be trading with. When you trade with a demo account you are using virtual currency, but with a live account you are using real money. The difference in what you are trading with actually brings a number of other differences with it.
When you trade with a demo account you do not have to worry about emotions. Very few traders will feel the same emotions trading virtual dollars as they do trading real dollars. This is actually a problem because you often go onto the live market unprepared for the emotions of trading. Greed, fear and anxiety are three of the emotions that you have to learn to deal with on the demo account even though you may not feel them.
The Order Execution of Australian Forex Brokers
Trading with a demo account offers instant order execution because Australian forex brokers do not have to put through a real trade. When you trade on a live account you will not have instant order execution. There is often a delay in the execution and the delay depends on the broker you are using. This delay in order execution can actually cause a number of problems when you trade with short-term strategies.
Short-term strategies need fast order executions because the trade opportunities move very quickly. When you practice on a demo account you may find that you are very profitable with your strategy. However, when you trade live the delay in execution can remove some of the profits that you would have been getting.
The Trading Platforms You Get
Most Australian forex brokers do not have different platforms for their demo and live accounts. However, there are some brokers that do have differences in the platforms. These differences are generally not major, but they are big enough that they can cause problems. With a live account the setting for something may be in a different location. This can throw you when you first start trading and could lead to some losses.
It is important that you find out if your broker does have differences in their trading platforms. The best way to do this would be to see what other people have to say about the broker. If you cannot find any information related to this then you should consider posing the question on a trader group of forum. Of course, when you do this you have to be prepared for some people giving you incorrect information or being snide about the question.