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Demo Funds, Demo Account

Demo Funds; What are demo funds, what is the purpose of it and why I cannot withdraw these funds. Practise without risk.

Demo funds or a demo account is there for the sole purpose of practising your desired trading strategy in a safe, risk free environment whiles getting a genuine live trading experience. Demo as per definition implies; a demonstration of a product or technique. Just like demo funds cannot leave your worse off in regards to losses, the same is true for profit gain.

Demo Funds

Demo funds are virtual funds (not real) allocated to your demo account. These virtual funds cannot be withdrawn thus there is no financial loss or gain involved. These funds are not real money. A good broker should give you the option to choose the amount of virtual funds you desire to simulate a real life deposit. As implied, you should choose an amount that is as close as possible to a real life trading scenario. This applies to your deposit and trading mythology. Failing to follow this process will leave you disappointed when transitioning to a live trading environment.

The take away here is that you should use demo funds to put yourself in a realistic position to simulate a live trading environment, tweaking your strategy to hield the highest returns long term. Implementing unrealistic expectations will result in inaccurate results that could leave you incurring losses when risking your hard earned money.