Demo Account FX Trading in South Africa – How Does It Work?
In the light of the worldwide events that led to increased unemployment rates everywhere, people have limited sources of income, or the wages are very low and can barely make ends meet. These forced people to take multiple jobs at the same time, side hustles, additional jobs, while some went for trading trying to generate income that support their living.
However, trading is a wide concept that is not taught easily with words, typically trading is the process of selling and buying goods or services, and earning the difference in these prices as a commission that provides income for the trader. There are several financial markets where traders can be active, forex, crypto, stocks, indices, and commodities are the main markets traders can get involved with.
Foreign Exchange Market, or Forex, is probably the most popular and the hugest financial market, whereas lots of currency pairs are being traded every day and people can make quite an income with it. To start your forex trade, you need to know the elementary of forex trade, however, forex trade entwines theoretical and practical technical knowledge to understand how things work, and you need to get hands-on before getting involved in such a trade.
Forex Demo Trading Account
Given the fact that forex trade requires hands-on experience on how things work there before starting, one might be hesitant to start any trading since it is -naturally- associated with some risk factor, and anyone can become redundant when it comes to money or the risk of losing money.
Therefore, few trading accounts now offer the option of a Forex demo account, where users can try out themselves before doing any monetary commitment.
A demo account is basically a simulation of a real account, with the only exception that the money is not a real capital funded by the trader, the capital there is just a virtual amount of money given with the account to test out a trading experience, so the trader does not put any real money, therefore does not lose any real money. While other functions remain the same, all the tools and visuals are exactly what someone can find in a real forex trading account.
Demo accounts introduce the traders to the buttons, functions, visuals that are shown in the trading software, in addition to knowing how to read and navigate through the platform, it also enables the trader to see directly the effects of every action taken during the trade.
Starting Your Forex Demo Account In South Africa
Today, most online trading platforms offer their users access to the demo account, which does not require real capital to be invested by the user.
The benefit of starting by using a demo account, is that you don’t have to worry about the reputation of the broker since anyway you are not going to invest real money, however, it is suggested to start off with the best forex demo account to have something very close to real-life trading, as well as to get familiar with the same platform services and ways of communication.
Plus500, one of the most popular trading websites, that is licensed to perform activities in the UK, Cyprus, Australia, Israel, Seychelles, Singapore, Bulgaria, and the United States, is also enabling their customer to have their forex trading demo account in South Africa, to open and start a forex demo account, get themselves familiar with the platform before starting a real forex trading, because practice makes perfect, and trading is all about practicing.
Besides that, every other registered and legal forex trading broker is offering their services to traders from South Africa, since the trend has increased due to the economic and the social situation ongoing in the country, where people seek out a better source of income.
Advantages of Forex Demo Account in South Africa
Starting with a demo account is not something very odd, the majority of today traders have started once with a demo account before hopping into a real trading account, for that has multiple advantages:
The most important feature of having a demo account is avoiding risk, when you open up a forex trading demo account in South Africa, you are starting off with a capital that is given by the trading software, and not with real money, which does not put the trader at any risky position while trading with any financial asset that provided by the platform.
Once you know how to use forex demo account, you are simply practically learning how to trade, in a way that might be better than reading a lot of books and attending some theoretical online courses because this is called learning by doing, you are simply implementing, observing, and learning, so you can carry that out to real-life trading whenever you decide.
Even the experienced traders use the forex demo account, for the purpose of testing. It is a great place to test out any strategy that you would like to implement
because in real trading there is no room for testing because that might mean losing your money, traders tend to use their demo account to try out different strategies, and to implement some trial-and-error testing, then reshaping that before carrying it to real-life trading.
Besides that, when a trader discovers a new trading instrument or new currency pairs, there must be some in-depth study of this potentially new trading position, and this study is carried out by applying a demo trading on it, observing how the market works out there, and taking notes and takeaways.
Disadvantages of Forex Demo Account
All the benefits explained before, shall not draw a perfect picture on the demo accounts, considered them flawless, there are definitely some drawbacks for this as well, and probably the following is the most important disadvantages of having a demo account
Devoid of Emotions
A Forex trading demo account in South Africa might replicate all the trading activities carried out in real trading software, which really works similarly in terms of functionality, visuals, and how to trade, however, it does not replicate the emotional bond associated with it because, in a demo account, a trader can easily put 1k in a random trade and lose it, without any kind of nervous or emotional reaction, which is not exactly the case for the real-life forex trade
Trading in a demo account is free of risk, but real forex trading is never risk-free, therefore, it is not the same when it comes to the risk factor, because the demo account does not train you to trade with nerve control, which might be the main problem while trading in demo accounts, especially if used for an extended period of time.
Should You Start Trading With a Demo Account?
It is highly recommended to start with a demo account, regardless of the experience a trader might have because a demo account gets the user familiar with the interface of the trading platform, mostly any licensed software offer a demo account, something like forex demo account MetaTrader 4, offers a flexible interface that new traders can read and navigate with.
Starting with a Forex demo account in South Africa is really easy, but it requires dedicating a considerable amount of time to learn, however, it will be worth it because this is the best way to learn how to trade in the foreign exchange market, as well as any other financial market.
There is no one size fits all in trading, therefore, the demo account is the best way to try strategies and implement different approaches to find the one the goes best with you, and the one that you find comfortable and feasible, however, later when you learn how to do it already, you will definitely return to the demo account to sketch a new strategy or plan and continually develop your plans to become a successful trader.