Online trading is easily accessible and available to people all over the world. Binary trading is one of the most popular methods, because it does not require you to be a trading expert. You can be a beginner and a newbie in the trading world, and still make profits from trading. Although it is easy to learn, binary trading still requires some practice and gaining some knowledge and skill. This is where demo accounts and paper trading can help you.
What are they for?
Most brokers offer demo accounts for their users. They are the same as the real trading platforms, only here you trade with virtual rather than real money. Paper trading is a bit old-fashioned, but it is very useful when the demo account expires. You can follow the events in the market, perform the “imaginary” trades you will write down on paper and see how the trades will end.
These methods are both suitable for practicing your trading strategy, whether you are a beginner or an expert in trading. They are also useful when you choose a broker for the first time, or change to a new one. This way you can check if the broker’s platform suits you, whether you can find what you need on it and how fast it reacts.
Even though it seems a bit obsolete, paper trading has certain advantages over demo account. Fist, it is detailed, because you can determine the amount of information you want to note about each trade. Then, it is unlimited. You have the access to demo accounts for only a limited period of time, after which you need to switch to trading with real money. Paper trading allows you to practice as long as you need, with no obligation of investing real money. It is also adaptable, because you choose the number of trades and details about each one. And last, it is always free of charge, and you can use it even if you do not sign up with a broker.
The biggest disadvantage of paper trading is that it is slow. It takes time to write everything down and transfer if from platform onto paper. Also, it is not realistic, since you cannot use the platform to practice, but you can only imagine it.
Demo accounts are ideal for practice because they offer real trading conditions. All large brokers, like 24option, offer free demo accounts. You can trade directly on the platform and see how it works, and not lose a dime. It is also fast and depicts the real trading situations. Another advantage is that it is usually free of charge, so you get real trading conditions without investing and losing anything.
One of the main disadvantages of demo accounts is that they always last for a limited period of time, after which you
need to trade with real money. Also, they often require signup with the broker, so you do not have the access before you create an account. Brokers sometimes even require you to place the first deposit if you want to gain access to their demo account.
Even though there are pros and cons t both approaches, they are certainly both very useful for practicing and perfecting binary trading. No matter if you choose paper or demo trading, or even both, you are likely to benefit from it in the long run.