If you are considering investing in the Forex market you need to get real and authentic knowledge with currency trading pros and cons. Trading currencies on forex has become a popular choice for many investors. As with every type of investment, there are risks and there are benefits. Before you invest, you need to carefully evaluate the pros and cons of currency trading. By evaluating both the merits and the demerits, you are in a much safer position to profit and can enjoy currency trading for many years to come
Advantages
No fear of losing money: Psychology of the investor is greatly influenced by the stress or fear of losing money. He does not want to make a loss. If you have virtual money it is easy to use high leverage and does trades without any analysis or planning. Since the money is not physical or real, he will not experience any stress playing with the virtual money. It will be safe and easy to take big risks and gambles in the Forex Trading Demonstration account.
Polish the skills of the investor: It is said that “practice makes a man perfect” This practice account will give the trader most of the skills necessary to be able to trade profitably. It will brush up his basic fundamentals on Forex trading.
Learning experience: The Forex Demonstration Account provides the investor with an opportunity to learn from the mistakes that he has made in the past while trading. After analyzing the results from the previous trades, he will be able to make changes in his strategy or continue with the one that is working. Thus, he will be able to maximize his profits in the long run.
Shorter time for execution of orders: Real account works differently from the demo account. The orders that you place in a real account could take much more time to be executed than a demo account. . If your strategy is based on short time order placements, this time slippage would mean a drawback and money loss.
Disadvantages
1. Management of emotions: Most investors have emotions of greed, fear, impatience associated with their Forex dealings. It is better to understand these emotions and to use them to your advantage in understanding the market.
2. Earning money in the true sense: A demo account is not a real account. Therefore, the satisfaction associated with earning real profits which is present in real Forex trading accounts is absent in a Forex trading demonstration account.
Conclusion
It is essential for an investor to remember that there is no easy money in Forex. The pros and cons of trading the Forex demonstration account are an overview of the Forex system. Greed and stress are two negative emotions frequently displayed in forex investment. But if you want real trading you have to be ready to face psychological pressure which cannot be experienced in the demo trading account.
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